Bad cash flow = bad news. And one of the biggest reasons for poor cash flow is customers not paying their invoices on time. So, how do you combat the potentially negative impact of outstanding invoices and get back in control of your payments and cash flow?
The key lies in some strategic use of technology, and a lot of thought about your internal processes and customer relationships.
Having targets in place is a great way to motivate your finance team and give them a clear goal to aim for. Using the reporting capabilities of Xero, you can pull together numbers for the cash you collect from each customer on a monthly basis. And with these numbers in the bag, it’s easy to set achievable targets for future cash collection, based on the empirical data you already have in your accounts.
It’s annoying when a customer doesn’t pay on time, especially if you’ve made your payment terms clear on the invoice and sent it to their finance team in plenty of time.
But there’s no point in taking out that frustration on the poor accounts payable clerk at the other end of the phone line. There’s an old adage in credit control that’s as true as it is effective:
‘Polite persistence pays!’
Having a great view of your business information is the key to better decision-making. But staring at a page of figures, or a complicated spreadsheet, isn’t always the best way to see the important insights and pull out the underlying truths relating to your your financial and business data.
For most business owners, it’s not a good way at all.
Although we appreciate a good spreadsheet at Tyrrell & Company, we appreciate that it’s far more helpful for you to see your key business numbers in a visual format.
Coping with the ever-growing pile of paperwork, and doing all that tedious keying-in of data is something that gets left at the bottom of your to-do list.
That’s why when the weekend rolls around you can often find business owners hunched over their laptop, catching up on their bookkeeping.
But there is an alternative. It’s all about automation – and it’s something our clients have begun using to get their weekends back.
Are you and your team spending too much time on admin and paperwork? The average UK small business owner spends 16 hours a week on admin, 4 hours on regulatory matters and only 8 hours on actual business development. That’s far from being an efficient way to use your resources.
Running a business requires a large amount of record-keeping, administration and data entry. But do your people really need to spend so much of their week coping with keying in numbers and dealing with incoming paperwork?
The short answer is no: with modern cloud software you can drastically cut down the time you spend on this essential admin. And the combination of Xero online accounting software and the Receipt Bank plug-in are a perfect way to save time, cut costs and reduce that paperwork.