Most small businesses cannot afford to hire a professional accountant or even a bookkeeper, but that doesn’t mean they can just ignore their finances. Records still need to be kept, reports still need to be reviewed, and cash flow still needs to be monitored. It doesn’t need to be a difficult process, but it needs to be done on a regular basis.
Here is some sound accounting advice for small business owners:
Use client invoicing software
You can make all of these things easier by taking advantage of client invoicing program. It will make it easier to update your records, it will save all the details of your transactions, and it will quickly generate the important financial reports that you need to review. Client invoicing software is a convenient and efficient way to manage all of your accounting, especially if you are trying to manage it on your own.
Work on techniques that will help you manage your cash flow
One simple technique is working with your suppliers to ensure that everything is not due at the same time. Many companies will request that monthly expenses are paid on the first of the month, but that doesn’t mean they can’t be paid earlier. Spread them out over the course of the month, so there is never a sizeable lump sum due at the same time. You can also work with your clients to ensure early or timely payments by offering incentives or sending reminder notices. Make sure that the money you are owned is coming in as quickly as it can, so you don’t have negative dips in your cash flow.
Set aside an hour each week to update your records
If you don’t have a bookkeeper or accountant updating your records, you will need to make sure they are still be updated at least weekly. Don’t grab a shoebox or a file folder and start stuffing it full of all of your receipts with a promise that you will enter them into your accounting program at the end of the month. The bigger the stack of bills becomes, the less likely you will want to deal with them. By spending only one hour each week, you should be able to enter all of your expenses and income into the program, so the stack never accumulates.
Use adequate details
Whether you are describing an item on an invoice or filling in a deposit slip, make sure that you include all relevant details. If you write “cash deposit” on every slip, you won’t know the origin of the cash if the question arises later on. Just in case you need to refer back to something after weeks or months have gone by, it is necessary that you have a clear and complete description.
Create a schedule for reviewing your financial reports
There are certain reports that you should be reviewing weekly, monthly, quarterly, and yearly. Using an online or physical calendar, assign a specific day to each of these reports. For example, you could review your cash flow statement every Monday, your financial statement on the first Friday of every month, and your income statement the last Wednesday of each quarter. You can review them more often that your schedule specifies, but having a set schedule will ensure that you are at least reviewing them regularly.
It is strange to think that a word that was formerly reserved for a spider’s method of trapping food, now symbolizes speed, convenience, efficiency, and instant worldwide accessibility. Anytime the word “web” appears in front of a professional service, you can be almost certain it is an online program that was designed to improve upon a traditional business practice.
Web-based is More Affordable
There is now web-based project management, web-based marketing, web-based file sharing, and web-based IT programming, all available to businesses at a fraction of the typical cost for these services. Countless web-based applications are overtaking the business world, and invoicing is no exception. It is fast, efficient, and highly affordable. Some providers even off free basic packages to help you get started.
Web-based Invoicing Offers Simple & Fast Templates
Web-based invoicing software provides you with professional and organized templates that can be easily filled in to create quote, invoices, and even reminder notices. Users enter in their client’s contact information, payment terms, and product details when they first register, and it is securely stored online for future use. There is usually a variety of templates to choose from, so you can select one that truly matches your company’s image.
Web-based Invoicing Offers Automatic Formatting & Calculations
When it comes time to generate an invoice, all they need to do is select who is getting the invoice and what they are purchasing. Everything else is done for you, so you don’t need to play around with margins or use a calculator to figure out the total amount owing. The web-based invoicing software formats the details in an easy-to-read manner, calculates the total, and automatically uses the information on the invoice to update financial statements.
Web-based Invoicing Tracks all Your Finances
What most people don’t realize is that web-based invoicing is more than just a program used for producing professional invoices. In most cases, it is also a full-service online bookkeeping service that can track all of the fundamental aspects of your accounting. If payable and receivables are entered regularly, it will produce accurate income statements. If you advise the software when a payment is made, it will create current account payables and receivables lists based on the receipts that have been entered into the software.
Web-based Means it is Always Accessible
Some web-based invoicing programs can even track inventory, payroll information, and client management needs. Whatever information is entered into the software is kept online, so it can be accessed from anywhere that has internet service. This means you can login to view your receivables or financial reports from any computer, laptop, or smart phone
Web-based invoicing is affordable, offers time-saving templates, handles the formatting and calculations for you, tracks all of your finances, and it is accessible from anywhere. That is why web-based invoicing is the way to go!
An invoice is sometimes the last contact you will have with a client after you have finished a sales transaction. A company’s invoice should be detailed, easy to understand, and professional. One great method for ensuring your invoice is an accurate reflection of your business is using an online invoice provider with expert looking invoicing templates and easy to use forms.
Here are 10 Terrific Tips for online invoicing:
Use clear and precise details.
Every line on an invoice should be straightforward and easy to read. Use brief descriptions as headed and then breakdown the details underneath each charge. Try not to use overcomplicated terms that your client may not understand.
Breakdown all costs involved.
It is best to use the same structure as any quotes or pricing guides that have been previously given to the client. One lump sum will look overwhelming. Breaking it down into smaller pieces assigned to specific services make the total amount seem more justified.
Give each invoice an invoice number.
Having an invoice with a unique invoice number is essential for easy referencing. This will help both you and the client keep track of what has been paid and what is still outstanding.
Create itemized lists of products and services
If you are using electronic invoicing, you can enter all of the details for possible charges in advance. This way you can simply select a service and everything else will fill in automatically.
Clearly outline terms on quotes and invoices
Make sure that payment terms are always in a visible location on initial quotes and final invoices. This should include a due date, as well as an incentive for early payment (if applicable).
Include a section with various payment methods.
An invoice should never leave a customer question what to do. If you are using electronic invoicing and you can accept payment online that should be mentioned on the invoice.
Invoices should always look consistent
Every form a company uses is a representation of their business. If you are using the same uniformed template for all of your forms, it will ensure your company is giving its clients a professional image.
Email the invoice directly to the client
One great benefit to electronic invoicing is the ability to send the invoice immediately to the client’s inbox and then receive a read receipt once it is opened. This will save time and reduce paper costs.
Send a reminder notice before the invoice is due
Another good practice for online invoicing is sending a professional notice prior to the invoices due date. This will gentle remind the client of the debt and ensure timely payment.
Thank each client for prompt payment
The last and most forgotten step in online invoicing is taking the time to thank the client for their patronage and payment. This will stick in a client’s mind and hopefully make them return again in the future. Most online invoicing providers will offer an automatic thank you notice, so you won’t need to worry about forgetting to send one.
Some small businesses are content maintaining the size they are at, while others are desperate for growth. If you are hoping to expand your business, there are several measures you can take to improve your chances.
A few tips on how you can set your small business up for growth:
Build Stronger Customer Relationships
There is nothing more critical to your success than building stronger customer relationships. It is absolutely necessary for growth and it won’t happen without a sincere focus on quality and customer satisfaction. Not only does maintaining regular satisfied customers mean that you will have a steady income, but happy clients can also provide powerful word-of-mouth marketing to attract new customers.
Develop a Powerful Online Presence
A solid online presence involves an interactive and informative website, a Facebook page with fans, and a twitter account with ample followers. This will not happen overnight and it starts by marketing your business within the people you already know. Encourage people to engage in your social sites by making irresistible offers or posting compelling content.
Always Look for Opportunities to Expand Your Knowledge
Even if you do not have the time or the desire to study in a traditional classroom, there are many ways you can expand your knowledge and learn new ways to make your business thrive. Opportunities to expand on what you know can occur at any time, so be aware and embrace them.
Set Goals that Push Your Boundaries
Goals can be a great way to channel your energy and measure your progress. Successful people view goals as an opportunity to push themselves to reach new heights. Every business needs goals for real growth. The more that you are driven to challenge yourself, the more you will gain over time. You should create a plan for growth by writing down specific long and short term goals for your business.
Create Systems that are Scalable
Make sure that the programs and system you use are scalable. For example, your invoicing or accounting system will need to have unlimited entries, so you do reach capacity and need to make a drastic change. Once you establish a working strategy, it needs to be that is adjustable enough to grow with your business.
Invoicing is a fundamental aspect of every business. It is also the last impression a company gives to a client or customers once a sale is complete. Ensuring that your invoice is clear and professional is worth the little bit of effort it takes to do it right. If you are not sure what a good invoice should look like, take a discerning look at your current bills from reputable businesses.
What do they all have in common?
In most cases, the first thing you will notice is that it is easy to follow and well-organized. All the charges are usually lined up on the left side, with the corresponding charges on the right side. The total owing is usually highlighted in some manner with a due date either directly above or below it. This is what your customers are expecting to see when they receive an invoice from you.
Here are a few essential components that should be a part of every invoice:
1. Use an invoice number – You can start with 000001 and work your way up to 999999. You may not end up needing close to a million invoices, but it will make it easier to reference each one as your business grows. It will also be rewarding when you hit milestone likes your hundredth or thousandth invoice.
2. Breakdown all charges – It will be overwhelming for a client if you just have one big total for all services rendered. Make sure your invoice is broken down with the same figures as the initial estimate.
3. Use clear and concise descriptions – Don’t just put the name of the product or project and a price. Your clients will need details for future reference, so they know exactly what they have purchased.
4. Always date the invoice – This will be helpful for tracking your invoice and running weekly or monthly reports. If you are using an online billing program, the date should be automatically generated for you.
5. Include terms and due date – The agreed upon terms and due date should be located someone close to the final total. This will make it easier for your client to reference it when it comes time to write the check.
6. Email the invoice to the client – Save an envelope, save a stamp, and save the time by emailing it directly to your client. Most modern invoicing software has the ability to send the invoice straight to your client’s inbox the moment it is finished.
Creating a complete and professional invoice is as simple as these six steps and if you use an invoicing billing application, all of this won’t take much effort at all. That is the right way to invoice and the best last impression you can leave on a client.
Many small business owners immediately hire an accountant or bookkeeper out of fear of being able to handle their business’s finances on their own. Your business’s finances are incredibly important, but there are simple ways you can manage it at the fraction of the cost of a professional.
How to manage your small business bookkeeping on your own:
Use customer invoicing software
This is probably the most important decision you can make for your business. Customer invoicing software is a fast and simple way to track all of your expenses from anywhere, at any time. These software programs are designed to be as simple as a matter of data entry, since all the formatting and calculations are done automatically. They have easy to use fields and toolbars and every report is instantly updated each time a new receipt is entered. Once the initial setup is complete, customer invoicing software gives you the ability to create and email customer invoices in a matter of minutes.
Devote one hour each week to bookkeeping
If you are using a customer invoicing software, all it will take is one hour every week to enter your bills and payments for the week, generate key reports like a cash flow statement and income statement, and then review them to ensure there are no potential problems. Set aside a specific time (like first thing Monday morning) that is devoted solely on maintaining and monitoring your bookkeeping.
Reconcile Your Bank Statements
Never assume that everything is accurate just because you are using an automated system. There is always the potential for human error in regards to bookkeeping. You could simply enter a 2 instead of 5 and not notice it, even if you make a point of double checking your work. If a company fails to reconcile their bank statements every month, these errors may go undetected, which will affect future data. The reconciliation process gives you a method for double-checking errors that you could have made, as well as errors that were made by your bank.
Pay attention to Payables & Receivables
There are two things every business needs to ensure when they are managing their bookkeeping. They need to make sure they are paying people on time and they need to make sure they are being paid on time. During the time you have scheduled to update your books with new receipts, run a quick payable and receivable report, so you can double check that nothing is past due.
Thanks to modern technology, there is no specific skill set required to manage your bookkeeping. As long as you can type information into open cells and select print, all the information and reports will be there for your reference. Try handling it on your own, before you consider paying someone hundreds of dollars each week to do it for you. An hour or two of your time each week could save you thousands in the long run.
A receivable cannot be used to help grow or sustain your business until it has been paid. Most reputable companies consistently pay on time; however there are some that just can’t seem to stay on top of it, regardless of their good intentions. This article will give you some powerful tips to help you turn your invoice into a payment quicker, so you can reinvest it back into your company.
Here are five simple steps to getting paid faster:
1. Create a detail estimate for your client to sign off on.
Make sure that there is an established quote with a clear breakdown of the charges that the client has approved, so there is no doubt about what is due. This same information should appear on the invoice, so they can see the details of each charge. If you used client billing software to create the estimate, you can quickly turn it into an invoice without having to re-enter the information.
2. Negotiate better terms upfront
You can always offer incentives for faster payment or negotiate interest for late payments in advance, to inspire clients to pay a little earlier. Most companies will appreciate a 1-5% discount for paying in 15 days versus the typical 30 days standard terms. There should also always be a note on the invoice that interest will be charged after a specific period of time. You do not need to ask for interest within the first 60 days, but after 60 days it is a reasonable request.
3. Send the invoice as soon as the project is complete
It only makes sense that the sooner the invoice is in the client’s hands, the sooner it can be paid. If you use client billing software, you can quickly generate the invoice and email it directly to the client. This software usually offers a read receipt, so you know the moment the client has reviewed it. Online client billing software is also more convenient, since you can create an invoice from anywhere with internet service.
4. Offer several payment methods
It is important that you offer your clients an added convenience by giving several different payment methods they can use. These choices should be indicated somewhere on the invoice close to the total amount owing. Some clients will still send the check in the mail (which always add to the wait time), but others may choose to use an online payment method like Paypal. Being able to offer fast payment options is one of the best ways to make sure you get paid sooner.
5. Send a professional reminder notice
Sometimes all it will take is a polite and well-written reminder to move your invoice to the top of the heap. Client billing software programs are usually setup to automatically send a reminder prior to the invoice being due. This should certainly improve the chances of getting paid on time.
All it takes is a clearly defined quote, favourable terms that were negotiated in advance, online billing software to send the invoice immediately to the client, a choice of convenient payment methods, and a professional reminder notice before it is due to ensure that you get paid faster.
Online billing is transforming the world of traditional invoicing into a convenient and efficient business machine. It takes all of the benefits of modern technology and applies them to the usually complicated process of record keeping and financial reporting. Besides being a fast and easy way to manage your bookkeeping, online billing software also has many additional features that you can use to your business’s advantage.
Simple ways to use online billing to your advantage:
Create Invoices in a Matter of Minutes
Once the online billing software has been updated with your businesses contact information and sales SKUs, it is simply a matter of selecting a client, selecting the items you are charging, and entering in the price. The software will do all the formatting and calculations on your behalf, which will save you precious time. You can use this to your advantage by spending that extra time on generating new business.
Email the Invoice directly to the Client
If you use online billing software, you can send the invoice to the client’s inbox, and even request a read receipt, so you know the client has seen it. These programs even come with the ability to send automatic reminder notices and thank you letters once the payment has been received. This can work to your business’s advantage by speeding up the usual payment process.
Easier to keep Reports Up-to-date
Every time a payable or receivable is entered into the software, all relevant reports are automatically updated. You can login and view (or print) your financial statement, cash flow statement, income statement, or account receivables/payables reports instantly. As long as you are entering each bill into the system as you receive it, the reports will be accurate and current.
Accessible from Anywhere
Since your bookkeeping is being managed online, it can quickly be accessed from any computer that has an internet connection, include smart phones. This can be incredibly advantageous, especially when you need to make quick business decisions outside of the office. As mentioned in the previous point, the reports you view will have the most reliable figures. This means you can make fast financial decisions that could benefit your business using the most current picture of your company’s financial status no matter where you are at that moment.
Reduces paper cost
By working online, the decision to print hardcopies becomes completely optional. If you are emailing invoices and reminder notices to the client, it will save your business on paper, envelopes, and stamps. This is not only an advantage to your business, but it is also beneficial to the environment.
Online billing creates invoices in minutes, emails them directly to the client, automatically updates financial reports that are then accessible from anywhere, all while reducing paper costs. These are just some of the many ways that online billing can be used to your advantage.
The old basic billing and payment system not only took significant time to generate invoices, but due to traditional mailing methods, it also took a great deal of time before the invoice was in the hands of the client. A bookkeeper first needed to create a template in Microsoft Word that would require constant formatting and adjusting every time it was used. Next, they need to enter all of the information in regards to that specific bill, and then use a calculator to figure out the taxes and total. The invoice was then printed (usually several copies), folded, and mailed out. The client would receive the invoice several days later, manually write a cheque, stick it in an envelope and then mail it back.
Times have changed and you can now immediately email an invoice directly to the client and then receive payment the same day using a variety of quick online payment methods. Small businesses with tight margins whose survival depends on receiving payments quickly can especially benefit from the advantages of electronic invoicing and payment services.
Electronic invoicing was specifically designed to save small businesses time and money. Most online invoicing providers offer simple, ready-to-use templates that anyone can quickly update. Once a company has entered their contact information, payment terms, and item descriptions into the program, the information will be permanently stored and saved for future use. This eliminates time-consuming double entry, allowing business owners to generate professional invoices in a matter of minutes.
All the bookkeeper needs to do is select a client, choose which products or services they are purchasing, and the invoice will be automatically updated. It will calculate any taxes, the total amount, and even the due date. It can then be immediately emailed to the client and all corresponding financial reports produce by the invoicing software will be instantly updated with the new information.
Before the invoice is sent to the client, make sure there is a sentence or two indicating the various payment options. Cash and/or check might be excellent choices for you, but they are not always convenient for your client. Having electronic payment capabilities offers your customer’s choices like paying online or by phone using a credit card. There are a lot of different companies like E-pay or Pay Pal that have made electronic payment options more affordable and accessible for any business.
Electronic invoicing and electronic payments are not only simple and convenient choices, they also environmentally friendly ways to reduce costs. There is no need to print extra copies of an invoice, purchase envelopes, and then pay for stamps to send it by mail. By handling the transaction completely online, both companies will reduce their paper consumption and save money on postage.
Small businesses should be regularly looking for ways to save time, improve the payment experience for their clients, and cut costs in order to grow their business. Using an electronic invoicing and payment system can quickly achieve all three of these benefits for your small business.
As a small business owner, chances are that you are working non-stop to try to grow your business and every second counts. Fortunately, not every day needs to be a 12-hour workday and there are methods that can help improve your efficiency. With the right tools and business services at your disposal, you can reduce the amount of time you spend managing your business and use more of it to enjoy your success.
Here are a few best practices for streamlining your small business:
Use time-saving application and software solutions
Have you heard popular phase “there’s an app for that?” In today’s modern technological world there is an app for almost anything, especially when it comes to running a business. There are project management apps, invoicing apps, organizational apps, and communication apps that all designed to streamline standard business practices. These programs usually come with pre-made templates and easy to use forms, so most of the work is already done for you.
Outsource when it makes financial sense
Many small business owners feel this need to do it all on their own. They manage their company’s marketing, finances, sales, legal concerns, product development etc., regardless of their personal expertise. They figure they have the internet as a resource if they get stuck and that they are saving the money they would have spent on someone else. They neglect to consider the fact that their time could be better spent on something they are skilled at doing and that even their best effort may not be good enough. Sometimes you need a professional’s guidance, especially when there is money involved. If you are not confident in your own abilities, it should be outsourced to a professional.
Use email to reduce paper costs
If you don’t need to print it, don’t. If you are not required to send it by registered mail, don’t. Thanks to the convenience and traceability of email, there is no need to print a copy of your correspondence with vendors or customers. Everything can be saved in a folder within your inbox, which will be easily accessible anytime you need to reference it.
Know when to delegate your workload
If your small business consists of only you, it will be difficult to delegate when the workload becomes too heavy for you to manage. You will need to either prioritize and push through it, or hire outside help. However, if you have a few employees that are available, make sure you use them. Any aspect of your role that is not critical to your business’ success can be delegated to someone else who has more available free time. There is nothing worse than the boss working non-stop through their lunch, while his or her employees are taking an extended lunch because they don’t have enough work to keep them busy.
Streamlining your business can be as simple as taking advantage of technology, outsourcing when needed, using emailing for communication, and learning how to delegate. Spending a little time on improving your company’s efficiency now, can save you significant time in the long run.