Improve Your Billing and Accounts Receivables by Following 3 Experts
Agencies and departments keep improving their billing and accounts receivable procedures in order to make them more efficient to get all the payments needed to respond to the obligations that might appear every day. The improvement in time and place for transactions has become a “must” in some industries in order to maximize the return of both time, as well as the investment made. The first thing one thinks when we talk in improving billing and accounts is always in terms of reducing bureaucracy and manual labor that consumes a lot of time, in this article it was possible to gather the opinions from three experts in billing and accounts, we will see their perspective concerning this matter.
Early payments, an alternative for customers and companies
According to Dawn Brolin, the CPA, CGMA of Powerful Accounting, the best solution for companies is to encourage customers in terms of work practices. That way it will improve the work dynamic and delays in payment will surely become less often contributing for a healthier job relationship. It will be a win-win situation, you will save money time and problems, while the customer will save problems, time and will have at his disposal the best quality service provided by a company.
Begin by showing all your company’s traits while giving the client a letter which has all of the expectations in terms of services, regarding the project or maybe training needs. The next aspect to have concerns about in on the payment form, for this one it’s needed an authorization to be specified in a contracted. If this contract states that the payment will be withdrew after the first job assignment and the following payments will be made after the first deposit, you’ll have to discuss it with the client. However, always remember the client that an early payment is an assurance of quality of work.
How can early payment be an incentive? Simply if you offer some type of discount for paying earlier or to give a bonus for future assignments that can be a plus in terms of taxes. However, you also have the possibility to use some reverse psychology in terms of incentives, remind your clients that paying later can mean losses in terms of penalty or increase in interests.
Dealing with late payments
Shayna Chapman, CPA, CITP and CGMA for Shaynaco gave her feedback regarding the work with clients in her activity. This is a perspective that has hard negotiation on it, because if you have your activity, you need to have money to maintain it, otherwise, the losses will be yours. The sentence “a good customer is a paying customer” is well enforced in this approach.
Set the profile of your client and the way they work and pay, remember that their payment calendar can be quite different from yours, that way you’ll be able to adjust your activities to fit in terms of time. You have to previously decide the form of payment and agree it with the customer, that way you’ll be protecting yourself in terms of payment and even in a legal way. If you want to offer discounts or bonuses, make it in a way that doesn’t hurt your own activity, if you start working for free, most likely you’ll go bankrupt, always protect your own bank so that your business can prosper.
The most important advices however, is to keep track of the client’s activity and payment. If the client keeps getting late on the payment, maybe it’s not worth to keep them, since it’s giving more losses than benefits. Finally, provide billing at the arranged timings, if you show competence, most likely the client will pay front up to match your effort.
Technology and third parties are an important part of billing
Randy Johnston from the K2e gave valuable insight in terms of billing and the most proactive one. He clearly states that the billing should take the minimum amount of time from the company in order for the company to focus on improving their levels of efficiency in the activity.
In order to gain time to focus on the activity and not on the billing, there are two available options: Third party companies and the use of specific software. You need to check the type of revenue your company makes and compare with the expense you’ll have to make, if you have inside your company an alternative to work with software, you’ll be saving time and money, but if your billing services inside the company take too long, probably you’ll need outside service.
Finally, simply define the billing format that your client will require. This is an easier approach, since you don’t need to specialize in billing and you can focus in your own work. The only thing you need to be aware of is the expense you’ll be making in investing in this solution and making it according to your level of revenues.
Hi, I’m a Tax Professional based in New Jersey.
I love to cover Tax and Accounting matters. I’m a business owner deep down, and admire men and women who would like to create business enterprises and promote the economy. I hope you enjoyed my column. Please don’t hesitate to send me comments.
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