As a small business, one of the most important tasks you take on is billing. Billing is how you get paid for the work that you do, and it is how you establish your cash flow. Without an effective billing process, you will not have the money coming into your business that is necessary for your business to succeed. Billing is not something that you should overlook as a small business owner, as it is crucial to your success.
1. Create an Organized Billing System
The first thing you need to do is create an organized billing system. That may entail purchasing and learning how to use billing software so that you can create invoices as soon as an order comes in and send the invoice out as soon as the work is complete. You need to have a formal, organized system for tracking invoices and payments in order to ensure you have a steady cashflow.
2. Create an Easy Payment System
Second, you need to create an easy payment system for your customers. The easier it is to pay you, the more likely you are to get payments in a timely manner. If you only accept checks or money orders, it is going to take you longer to get payments. Instead, you need to offer electronic payment methods. For example, you could accept payments via PayPal or ApplePay. Having a payment method that allows people to pay you with debit cards, credit cards, or with electronic transfers from their banks will make it easier for you to get payments.
3. Have a Reminder System
Third, you need to have a reminder system for your invoices. A large portion of your customers are not going to remember to pay their invoices the first time they get them. You should have a policy for sending out reminders to your customers concerning payments. For example, you could send out a payment reminder at 14 days, 21 days, and 45 days. Automating this system can be useful.
4. Get Assistance
You don't have to handle collecting payments on your own. You can work with an accounts receivable management company. You can have them handle any accounts that become overdue. For example, if you have not received payment within 45 days, you can hand those accounts over to your accounts receivable management company and have them deal with your overdue and delinquent accounts.
When it comes to running a small business, you need to have a system in place for invoicing and collecting payments from customers, and you need an accounts receivable management company to back you up on collecting payments on overdue accounts. Getting paid is important for the overall success of your business.
