Did you know even profitable businesses can sink if they have cash flow problems?
A modern, efficient accounts receivable system is a must to get paid on time and in full; it’s difficult when your AR system does not function properly.
Not sure if your accounts receivables are operating properly?
Let me rescue your books and help with your AR system.
With that being said, here are 3 best practices in billing and collections:
Billing and Collections Best Practices
Getting paid on time and in full is the lifeblood of your business (aka cash flow).
It’s no surprise that more than 80% of businesses fail after 10 years because of cash flow issues. Cash flow is simple to monitor, but it can be tough to create.
This is why your accounts receivable system needs to be modern, efficient, and accurate.
Here are 3 billing and collections best practices:
#1. Use an Automated System
As much as you can, use an automated system for billing and collections.
You wouldn’t use a typewriter to write up a letter and send it in the mail. So don’t use manual systems like Excel or similar to keep track of and bill your clients.
Manual bill and collection processing leaves a ton of room for error. And when you’re working to keep cash flow positive, every mistake counts.
Use accounting software instead, so that you can keep a record of everything, as well as have access wherever you have an internet connection. It’s no paper system, but it’s much more accurate, easier to manage, and simpler to integrate with the rest of your business. I recommend Quickbooks Online to 99% of my business owner clients. Are you a government contractor? No problem. I’m an Authority with DCAA-compliant accounting software as well.
#2. Send Invoices Electronically
No need to send invoices via post anymore. Instead, you can deliver them near immediately over the internet – and you don’t have to pay for receipt notification. Your accounting software lets you know when the invoice has been viewed, which means you can follow up on invoices as needed (or, you can set up automated invoice follow-ups to save you time and energy). Why not choose an Invoicing Expert like me who handles it all? Invoicing your clients/customers directly? I act as the Invoicing Department for some of the largest businesses in the area, and I can manage yours as well.
#3. Offer a Discount for Early Payments
If cash flow is the lifeblood of your business, then early payments are an injection of energy into your bottom line.
Yes, people will pay early if you give them a discount. And it’s wise to offer this so that you can get your cash sooner rather than later, which means you’re leveraging capital sooner to make important business moves.
Reward your early payment clients with a discount and you’ll get to your earned cash sooner.
Are your accounts receivables a mess? Let me rescue your books and bring them current the very first time. I manage all your bookkeeping and accounting needs as your outsourced bookkeeping and accounting department.
How about implementing a system where credit cards are collected upfront thereby decreasing your delinquency to basically nil? I put these best practices in place for your business.
How Do I Fix My Billing and Collection Issues?
Hire me, your Master Outsourced Bookkeeper & Expert Virtual Accountant.
I bring your books current the very first time.
I deliver accurate, spot-on reports weekly, monthly, quarterly, or whenever you like without fail.
And, I help you forecast your financial future so you can know exactly where your business stands financially.
Don’t let lousy billing and collection procedures, or lack thereof, get in the way of you growing your business (or worse, causing the IRS to come knocking).