One of the biggest rewards of small business is the freedom to be your own boss, however it often involves taking on uncomfortable tasks such as chasing up slow-moving debtors. Late payments add financial and administrative pressures, damages business relationships and encourages business uncertainty.
Research shows small businesses are spending on average about 10% of their day chasing invoices, which equates to two days per month. That’s a lot of wasted time, and it can have a significant impact on cash flow. We’re taking action to raise awareness of the issue. Here are some challenges faced by small business and some options you may wish to consider;
Getting invoices out on time when you're busy
This is a common problem. When your business is thriving and you're busy working to make money, taking the time out to send invoices can be difficult. Consider using cloud accounting software to quickly prepare and send invoices.
Following up on overdue invoices
This is related to the previous point – time is always at a premium in a busy small business. Again, cloud accounting software can help by automating reminders based on your settings.
Splitting payments across multiple invoices
Account reconciliation can be tricky at times. Make sure your clients include your invoice numbers as references for every payment they make, to help you work out which invoices have been paid.
Invoicing quickly and accurately
It's important that your team communicates effectively with your finance manager or accountant, to ensure that work carried out is invoiced properly every time.
Ensuring that all completed work is invoiced
Time-tracking software can be useful here, especially when there are several people working on each client account. Be sure to get this right, otherwise your business will be throwing away money by working for nothing.
Creating an invoice that doesn't go to the bottom of the pile
You can design your invoices so that they stand out, but what's more helpful is to build up a good working relationship with your client's accounts department. Don't rely on a pretty invoice to get you paid
If you would like to learn more about getting your invoices paid on time, maybe it's time to consider Xero accounting software. Our Xero specialist Kade Tronson is here is answer your questions. Contact Kade on (03) 9744 7144 or email firstname.lastname@example.org