December, 2016

7 top tips to get paid faster

Small businesses depend on prompt payment, so we have come up with 7 top tips to get paid faster!

1. Discuss payment terms before you get started

Getting this sorted upfront means that there is no confusion down the track.  It also sets the client’s expectations around payment before you start the work.

2. Keep detailed records of materials used and time spent

This saves time when it comes to creating the invoice and makes sure you don’t miss anything.  It also means if things are going over budget you can let your client know, instead of sending them an expensive surprise at the end of the job.

3. Make the invoice clear and easy to understand

List the details of the job in a way that makes sense to the client – any confusion could create a payment lag.  It’s also good to personalise your invoice with your business logo – it helps carry on the professionalism of your work.

4. Set appropriate payment terms

Many invoices are paid after the due date, so if you need the money in your bank within 14 days, set your payment terms to 7.

5. Address the invoice to the person paying

Make sure your invoice goes straight to the person who makes payment to avoid getting lost in someone else’s inbox.  If you’re unsure exactly who that is, give them a call – it pays to know the person paying the bills.

6. Invoice as soon as possible

Send your invoice as soon as possible; the sooner a client receives an invoice the sooner they will make payment.  It also means they will receive it when the value of your work is still fresh in their mind.

7. Keep on track with debtors

The squeaky wheel gets the oil.  When things become overdue send reminders, monthly statements or make a phone call.  It will help remind your client that you are serious about getting the invoice paid.  Some accounting software sends you an update when the invoice has been opened.

Adjust invoice payment terms to suit you

Being a small business owner often means you’re short on time, but it’s worth making the effort to get your invoicing set up properly.  Having a process that helps streamline invoicing can drastically reduce the amount of time you spend collecting your hard earned money.  And that’s got to be great for your business.

Download our free checklist - 10 step-invoice-checklist-to-get-paid-faster

 

Other Blogs that may be of interest

5-common-bookkeeping-traps-that-will-cost-you-money

The ins and out of being-a-contractor

Get a better tax refund from the ATO or reduce your tax bill

 

5 Common Bookkeeping Traps That Will Cost You Money

Although most small business owners and subcontractors recognise the importance of carefully monitoring their finances, few have the time to spend reviewing their numbers.  After all, for subcontractors and small business owners, if you are not actually working, you are not making money.

However, not keeping a close eye on your income and expenses can be very costly for a small business.

Here are five of the most common bookkeeping pitfalls, and some simple tips for getting back on track.

1. Mixing business and personal

All too often, business owners adopt a “buy now, sort later” approach to expenses, using the same credit card for personal and business purchases.  At the end of the month, they’re left poring over statements, trying to sort things out.  Mixing business and personal expenses costs extra hours of bookkeeping each month, and muddies your overall financial picture.

Avoid this pitfall by using a separate credit card and bank account for your business and being disciplined about keeping those expenses separate.

2. Neglecting to track reimbursable expenses

Receipt tracking is a necessary part of your business.  You need to keep track of receipts to understand spending patterns and effectively manage your company’s finances.  And, if you want to claim deductions at tax time, you’ll need to submit receipts along with your tax records.

But far too many business owners take a haphazard approach to collecting and organizing receipts, especially while on the go.  Get the deductions you deserve and simplify your tax prep by using an expense tracking app.  Options like Expensify and BizXpenseTracker can record mileage, billable hours, and other expenses, as well as generate reports.  Plus, many of these apps sync seamlessly with your business bank account and accounting software.

3. Not taking advantage of technology

Are you still relying on manual accounting methods?  While basic spreadsheet tools can get the job done, they leave the door wide open for human error. What’s more, manual methods simply can’t match the technological benefits offered by accounting software like MYOB, QuickBooks or Xero.  These systems track invoicing, link with your credit card and business bank accounts, organize expenses and generate informative financial reports.


4. Not keeping accounts up to date

Let’s be frank.  Most business owners don’t look forward to that weekly appointment with “the books.”   In fact, many business owners cite bookkeeping as their most dreaded responsibility and will find a host of reasons to avoid it.

5. Not chasing money owed

Whether it’s a delay in sending invoices out or failing to follow them up when they remain unpaid, the longer they go unpaid the higher the chance of them turning into bad debts.  So ensure that you either make the time to follow up overdue invoices or engage a bookkeeper to do it for you so you can focus on your business.

We can help you manage your bookkeeping, reduce your costs and ensure your financials remain up to date with our simple stress free service.  Call us today for a quote or to book a free no obligation meeting.