We all have things that we need to do that are good for us, but we often put them off. We do this in our personal lives as well as in business.
A past article we recently came across in USA Today lists out six things that small businesses should do, but that many don’t do or don’t do well. One, in particular, stood out.
3. Invoices. "Of course, you love money coming into your business. So, bill clients immediately after the work is done or the product is delivered. Better yet: Encourage clients to pay with credit cards at the time you interact with them. That way you don't have to send out invoices and wait 30 days or more to get paid."
Sending out timely invoices is an excellent start to begin improving cash inflow into your business. Waiting, say ten days after the work is done to send an invoice doesn’t mean that you waited ten days to get money in the door. More often, it means that you’ll have to wait 40 days to get the cash (if your terms are 30 days for payment.)
At Basis 365 , we do few things that help accelerate our cash inflows:
We automate our invoicing so that on the first of each month our customers receive their invoicing. As long as they are a customer and their monthly pricing plans don’t change, there is no further action needed from us to get the invoices out the door.
We send invoices via email to speed up delivery time (instantly). Email invoicing saves at least a couple of days on a round trip ride on the U.S. Postal system which doesn’t seem like a big deal, but on a large enough scale, it could have a significant impact on cash inflows.
We used fixed pricing to reduce the time wasted in drafting up an invoice. Fixed pricing adds to the speed at which we can send out an invoice.
We take credit card payments, and the cash hits the bank the next day. We have some legacy customers that still send in checks, but for new customers, we automatically charge their credit cards. It’s a win-win situation because it’s less of a hassle for them and us.
We encourage and help our customers to implement these tactics to accelerate cash inflow when it makes sense for their business to do so.
Another important item I found relevant and is often overlooked is data backup: Backing up. Your data is one of the most valuable assets your company has, but are you adequately protecting it?
If something happens to your business, will you be able to restore critical data such as customer records, product information, and employee records quickly and easily? Critical data should be stored securely in more than one place. And at least one location should be off-site.
The easiest way to do this is by using cloud-based services.
We are firm believers in the cloud and we believe small businesses should be in the cloud as much as possible.
We have our accounting data in the cloud [ Xero ] which allows for easy access for ourselves and customers. Our accounting data (and our customers’ too) resides on world-class servers that are systematically backed up offsite. We do this for our documents as well. By doing so losing data is a risk that we’ve minimized.
If you're interested in learning more about how cloud-based accounting could work for you, contact us for a consultation.