Invoicing and collecting on your invoices are crucial to your company's cash flow.
Since they form part of the 'bread and butter" arm of your company, an efficient accounting system is necessary.
You must be able to resolve small business invoicing issues quickly and enforce customer terms for payment. It's also recommended that you invest in an automatic A/R system.
Resolving Invoice Issues Quickly
It is imperative that customers receive their invoices immediately.
Regardless of how busy you are, you should always make every effort to send them out ASAP.
Procrastinating could send your customers the wrong signal -- that you don't take your relationship with them seriously.
If you can procrastinate, why can't they? Billing them promptly would also give you and your customer more time to resolve issues immediately instead of waiting until the last minute.
Enforcing Customer Terms for Payment
There are several ways to guarantee that your customers pay in a timely manner.
Make sure you know the person in the company who deals with accounts payable.
If their account is delinquent, ask them if there's anything you can do to ensure prompt payment in the future. Diplomacy is key.
Establishing rapport with the accounts payable person would be helpful. Plus, it would be in your interest to send out invoices that are attractive and easy to read to prevent confusion.
Automatic A/R - Tracking Results and Follow-up
Companies that use technology typically excel in receivables management.
Those that have technologically deficient A/R systems can correct those shortcomings either with an enterprise resource planning (ERP) system, or with a top-of-the-line receivables management application.
Many companies use ERP systems but fail to get the most out of them, while some of the world's best companies use function-specific applications rather than an ERP system.
For more information on A/R systems for small businesses, please contact us. Luxa provides outsource accounting and outsource bookkeeping services for small businesses!