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.
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.
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.
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?
Complete bank reconciliations daily to check who has paid you or has not.
With Xero, you can specify for reminders to be sent out at specific days after the invoice was due, making it an automated process.
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.
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.
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
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 email@example.com
Amanda Hoffmann is a registered Tax Practitioner / BAS Agent No.18613005, Associate of Finance, Xero, Myob & Quickbooks Proadvisor / Trainer and a Consultant for the Australian Taxation Office.
She says she is more than just a bookkeeper with experience in real estate investing, social media, podcasting, blogging and recently recording monthly youtube episodes
Amanda loves to teach smart, easy online cloud solutions and fix messy bookkeeping. Follow her on social media and say “Hi”
BAS Agent and Bookkeeping