Cash flow is the lifeblood of almost every business – without cash you can’t pay your overhead, cover payroll or purchase what you need to provide products and services to your customers. A business can be turning a profit but at the same time in financial trouble if cash flow is not managed properly. A good bookkeeper can help you make sure your customers and clients are paying you in full and on time, giving your business the cash flow it needs to succeed.
The Importance of a Good Accounting System
The first thing you need to make sure your customers are paying you on time is a good accounting software package. This doesn’t mean creating invoices in Microsoft Excel – you need proper accounting software that will track the invoices that you’ve sent to your customers and give you an aged receivables report that groups invoices that are not yet overdue, coming due soon, and overdue.
While there are a number of good accounting packages on the market, QuickBooks is the best for small businesses. It contains all the capabilities you need to produce professional invoices and some great reports that show you which invoices are overdue.
Simply Bookkeeping is an authorized QuickBooks Pro advisor and can help set you up in QuickBooks or show you how to get to all of the helpful reports and features to keep your accounts receivables getting paid on time. Visit our Contact page to find out how to get in touch with us, we’d love to help!
Regularly Review Your Receivables
Once you’re set up you must make a regular habit of checking your accounts receivables to see which invoices are overdue and which are soon coming due. Get in contact as soon as you can with those customers or clients who are overdue and give them a friendly reminder – maybe your invoice got lost in the mail or didn’t make it to the right person in their company to get processed. Keep regularly contacting those customers until you receive payment: remember, the squeaky wheel gets the grease!
Some companies will intentionally pay at the last possible moment or even a bit late. Remember, it’s their job to keep their money in their bank account for as long as possible so they can successfully manage their cash flow. However, this doesn’t mean that it’s alright to pay you late. Your invoices should clearly and explicitly state your payment terms (i.e. Net 30 days) and you should also have a late payment interest charge. Whether you charge your customers for late payments is up to you but it should be there to deter those who think there won’t be any harm in paying you late.
By keeping a close eye on your receivables you’ll get a sense for which customers pay on time and which frequently pay late and then you can decide how you want to deal with it – if they’re an important customer maybe you let their late payments slide but if they’re a high maintenance customer maybe you tell them that they should look for another supplier.
Let Simply Bookkeeping1 Help …
Successfully managing the cash flow in your small business is vital for it to succeed, but keeping on top of your accounts receivables can be hard to fit into your otherwise busy schedule and dealing with customers who pay late can be challenging. Hiring a knowledgeable and experienced bookkeeper to help make sure that you get paid properly and on time can be of great help to your business.
Simply Bookkeeping1 provides professional bookkeeping services at a reasonable cost and for many of our sole proprietor and small business clients we only need to work a few hours a week to keep their books up to date and in order.
To learn more about us, please visit our website at www.simplybookkeeping1.com or contact Michele Hyde by phone at (647) 668 – 9363 or by email at firstname.lastname@example.org.
Have Your Say
We’d love to hear what you have to say about your experiences and best practices for managing your small business account receivables and other bookkeeping topics. Please leave a comment below or share this article with your family and friends using the social media sharing buttons!