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14 April
2017
BUSINESS TIPS SMALL BUSINESS TOPICS
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Cash Flow Tips for your Small Business

Want to know some sensational cash flow tips for your small business?

What can a small businesses proactively do to get paid more quickly?

The first area any small business should focus on, is how they are going to be paid for their services.

Will a small business have service agreements, a credit term, be paid up front or be paid upon completion of the work.

Small business owners need to be completely transparent about their payment policies with existing and future customers.

Clear expectations and communication is extremely important, as cash flow can make or break your business future.

CREDIT TERMS OR SERVICE AGREEMENTS

Ensure that they have clear agreements with all their customers.

This may require them to have a legal agreement signed up by a lawyer that all customers need to sign before service can begin.

Open, clear communication can then be established with complete transparency.

INVOICE PROMPTLY

Many a tradesman will wait until the bills pile up (my electrical contractor husband is guilty of this) before forcing themselves to sit at their desk and write up their tax invoices.

This is not cash flow friendly and a new habit using your smartphone, tablet or contact the office remotely so that invoicing can be completed immediately.

AUTOMATED PAYMENT PROVIDERS

You can look at incorporating payment services like Stripe, Ezidebit, Paypal to accept credit card or Square to help your business cash flow by ensuring monthly fees and charges to your customers is completed by a third party service.

 

What are the benefits to you and your business using these add on providers?

  1. Make it easy and convenient to pay you
  2. Allow the customer to pay you anytime in anyway

BANK RECONCILIATION

Complete bank reconciliations daily to check who has paid you or has not.

AUTOMATE WHERE POSSIBLE

With Xero, you can specify for reminders to be sent out at specific days after the invoice was due, making it an automated process.

WHAT DOES XERO DO TO HELP YOUR CASH FLOW?

DEFAULT INVOICE SETTINGS

Take a look at Xero’s Invoice Settings

Look at the Due dates if it’s a default, or set as individual client settings.

Take a look at the Xero’s email settings, rather than just use Xero’s default, why not tailor it to your organisation’s needs?

Don’t be afraid to change the email to suit your company’s default.

Make it easier for them to pay you.

WHAT MY CLIENTS HAVE EXPERIENCED

Many of my customers are enjoying the benefits of this automated invoice reminder system that Xero gives them.

I have a plumber as a client who was a little nervous about how his customers might react to being reminded.

I suggested to him that I would put my name and business details at the bottom of the reminders so that we could play “good cop” and “bad cop”.

After a month of turning on the automated invoice reminders, he was pleasantly surprised to discover that customers would apologise about overlooking his invoice and paid him immediately.

His cash flow improved, and he no longer had to find time to call people so that he could pay his monthly expenses.

XERO APP

Don’t forget the Xero App where you can create a invoice when onsite with the client and send it via email there and then.

You don’t forget and the customer gets it straight away.

ADVANTAGES OF INVOICE DEFAULTS IN XERO

  1. Online invoices go straight to your customers email – front of mind and keeping postage costs down
  2. Set up a payment service (Stripe, Ezidebit, Paypal, Square) the PAY NOW icon will come up
  3. Attach files when possible (Agreement, photograph) so that the customer is prompted as to what the invoice was
  4. Don’t forget the option Xero to Xero (nominate each other as a xero to xero in the customer profiles : Customer Key)
  5. Always follow up – Set invoice reminders the day before a invoice is due, or as a reminder afterwards?

There are so many options available within Xero to make payment of invoices easier and more convenient.

If you want to know more about these options or set up a new Xero account, contact Amanda on 0423 463 721 or email her via info@myofficebooks.com

 

 

 

 

 

 

 

 

 

 

 

Amanda Hoffmann is a registered BAS Agent No.18613005, Associate of Finance, Xero Certified, Myob Essentials and Quickbooks partner.

She says she is more than just a bookkeeper with experience in real estate investing, social media, podcasting and blogging.

Amanda loves to teach smart, easy online cloud solutions and can show you how much fun bookkeeping can be. Follow her on social media and say “Hi”




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