Collect your cash faster – Streamline your Invoice Process

/in , /by

Invoicing is an important part of small business accounting. But the payment process will always be problematic if you don’t set up your invoices properly. So what can you do to ensure that invoicing is easy and your customers pay promptly and regularly?

Take the time to invoice properly
There’s much more to invoicing than simply sending out requests for payment. The key is to get your invoicing process right from the start.

It’s likely as a small business owner, you’re short on time, with many other elements of your business to set up, maintain and monitor. But making the effort to get the payment process right at the beginning will pay off in the end – literally. When your invoicing process is efficient and pain free, it’s likely that your cashflow will improve.

Develop the right mindset about getting paid
The majority of small business owners have worked as employees in the past, before deciding to set up their own company. The transition from employee to owner is not just practical and financial – it’s also psychological. In addition to this, if you’re having to now create invoices, you’ll realise how much time it can take to create and send them.

Employees become used to being paid regularly without having to think about it. The money appears in their bank account or they receive a cheque on the date it’s due. They never have to ask for payment – their pay simply arrives.

But business owners have to proactively chase payments – otherwise, they don’t get paid. And for some people, this can be a difficult adjustment to make. Consciously, you know you’re owed the money. But actually asking for it can feel daunting and stressful.

It’s common for small business owners to initially feel cowed into a feeling of subservience when it comes to asking for payment – particularly in dealings with larger organisations. But the fact is, they have taken your time and/or your product. This means they have a legal and moral duty to pay you according to the agreed terms.

So don’t be meek – be polite but firm. Your clients aren’t doing you a favour by paying. They must pay you, no matter how big or small they are.

Keep accurate records of your work
You can’t invoice if you don’t have accurate records of the work you’ve done for your customers. Keep track of the time and materials expended on a client’s project and make sure you invoice for everything!

Use time-tracking software and time-sheets if you need to record the number of hours or days spent on a project. Be sure to record all Bills of Materials too. Some software will handle this for you.

If you record the work done as you go, it will save you having to remember the details at a later date. It also means you’ll be less likely to forget to include something in your invoice.

Work out how regularly you want to invoice
Should you invoice regular clients on a monthly, fortnightly or weekly basis? It might depend on the type of work being done. For example, services contract work could be invoiced on a weekly basis, while a manufacturing project may be invoiced fortnightly or monthly. This is something to negotiate with your client.

However, be wary if a client insists on an invoicing interval longer than than a month. Unless the circumstances clearly justify it, that may mean they have cashflow issues.

Work out what your accepted payment methods will be
While some payment methods mean extra fees for your business, you should balance the costs against the ease of payment for your customers.

As a general rule, when you make it easier for your customers to pay, it will encourage them to pay sooner – and that’s always a good outcome. For example, some accounting software will add a ‘Pay now’ option to online invoices if you’ve integrated a payment service like PayPal. This means that you can send customers invoices online with the option of getting paid instantly.

It’s possible to differentiate yourself further by accepting new crypto-currencies like Bitcoin and other alternative methods of internet money transfer. However, at the moment it seems that many businesses doing this are more interested in the publicity than the practicalities. The exchange rate to ‘real’ currencies can be wildly variable.

Clearly define your payment terms
Make sure you define your invoice payment terms clearly on all invoices, for example “14 days from date of invoice” or similar. Put the actual due date for payment on the invoice too. Don’t leave your clients to calculate when 14 days from the 23rd February happens to be.

You can remind them of penalties for late payment and let them know exactly how much more it will cost if the payment isn’t on time.

But often a more effective approach, is to offer a small discount for early payment. This sounds more positive and your clients are likely to respond more quickly.

Be human when you invoice
It seems like a small gesture, but often talking to the people in the accounts departments of the companies you’re invoicing can make a difference. All it takes is a polite phone call to introduce yourself as the primary contact for payment matters.

This will often achieve much more than bland emails sent to people who don’t know who you are. A small investment of your time talking to the people who make the payments could prove invaluable to you. It may also help smooth out any payment problems that arise in the future, and it might even get you more work.

Invoice as soon as the work is done
It might sound silly, but some companies forget to invoice for smaller jobs due to the pressure of work and being short on time. They may also leave it for months and then start going through their records to check what they’re owed.

This is an inefficient way to run a business because it damages cashflow and reduces revenue from work that’s already been completed.

Also, if the invoice date drifts too far from the work that was carried out, your client may have some awkward accounts reconciliation to do. This is because the two events may fall into different tax years. So always invoice promptly, or as soon as the agreed work has been completed.

Invoicing should become a fundamental part of your business operations. Some accounting software will schedule invoices automatically for you, and even create and print them or email them to your clients.

Be taken seriously and create professional-looking invoices
At its most basic, an invoice is a written demand for payment. In theory it could contain nothing more than your company’s name and address and the amount owed. In practice you should include much more information than that if you want your business to be taken seriously.

Keep track of late payers
Once invoices have been issued, keep track of who’s paid and who hasn’t. Chase the ones who haven’t, though again it’s usually best to do this politely.

Good accounting software can provide ageing reports that will break down what you’re owed in order of age of invoice, showing you at a glance who owes you money and how much. It may also let you send emails to the slowest payers, so you can remind them of your payment terms and the due date. Some accounting software will also show you when your customer opened the invoice online. Customers won’t be able to pretend they haven’t received your invoice when you can see they opened it weeks ago!

Break down large jobs into smaller invoices
If you’re working on a project that involves a significant amount of your company’s time and/or expenditure in materials costs, it’s worth invoicing in chunks. As an example, you could do one-third up-front, one-third halfway through the job and one-third on completion.

You can negotiate with your client to decide on deposit and balance payments that suit you both. That way, if your customer runs into financial problems part way through the project, you won’t lose everything they owe you, or all the time and money you’ve spent doing the work.

Get the process humming, and you’ll get paid faster
This might all seem like a lot to think about. But once your invoicing process is properly set up, it should run smoothly and without too much intervention.

A combination of the right attitude, processes and accounting software will help you to invoice your clients properly, and encourage them to pay you on time.

 

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

Xero and Notch Above Bookkeeping have joined forces to offer 6 months free Xero subscriptions for new Xero files set up by Notch Above Bookkeeping. (Valued up to $540) Limited numbers apply so enquire today – life@notchabove.com.au. You too can then ensure your invoice process is streamlined.

The changing face of business software

/21 Comments/in /by

If you started a new business a few years ago you would probably have bought an office suite to help you run it. This would contain a word processor, a spreadsheet application, a presentations tool and maybe a drawing package and database program too.

Then you’d spend time setting up these applications to suit your business. That meant creating templates for documents, using spreadsheets as invoices and building presentations for clients. Office suites usually didn’t include an accounting package, so you’d have had to buy that separately, along with any specialist software.
This all worked quite well, but there were some major problems.

Five reasons why traditional software doesn’t work
1. Jack of all trades but master of none
These suites were designed for every business, which meant you were paying for features that you might never use. They also used a lot of computing power because they were so big and bloated.

2. Upgrade delays
Most software suites were updated once every year or 18 months, so you’d have to wait a long time for a new feature you really needed. And bugs took a long time to fix, too.

3. Poor integration
Connections between the software packages in the suite were reasonably good, so you could import spreadsheet data into your word processor, for example. But connecting to other applications, such as accounting software, was much more tricky. Sometimes it might work, sometimes not.

4. Expensive to use
Office suites have never been cheap, especially the ones from big software companies. For a small business on a budget, the cost could be a real problem.

5. Licensing issues per user
Office suites were usually sold on a per-user basis. You often had to decide how many licences you’d need and pay for them up-front. Not ideal for a growing business.
Things have changed, and now there’s a better way to get the right product for your company.e one-size-fits-all package is no longer the ideal option.

The new world of business software
Office suites are still available today, and many companies find them useful. They’re especially popular in larger organisations, where in-house IT teams can configure them in bulk to suit their users.
But for smaller businesses, the one-size-fits-all package is no longer the ideal option. The explosion of apps in the past few years has given small businesses much greater choice.
Now you don’t need to buy an entire office suite just to use ten percent of its features. Instead you can buy individual apps that provide everything your business needs, often at a much lower price.
Many of these new apps connect together almost like building blocks, sharing data with ease. And since they are often cloud-based, they can be accessed from anywhere, not tied to a single desktop computer.

Seven ways to make custom business software work for you
So how do these apps work, and what are the benefits? We’ve compiled seven of the main points here.

1. Pick and mix the software you need
Maybe you need a CRM application but not a word processor, or an accounting package but not a spreadsheet. That’s easy – pick and choose what you need, not what a software company thinks you need.

2. Find specialised software for your business
Plenty of software products are written by small development companies to solve specific problems. Chances are, one of them has written an app that does exactly what you need – and if they haven’t, you could ask someone to write it. Search the software marketplace and see what turns up.

3. Get fast upgrades and bug-fixes
Small, nimble development companies can upgrade their software much faster than big software houses. That’s because they’re only working on a tiny fraction of the code. It’s much easier to update a time-tracking app than an entire spreadsheet application, for example. So you get faster updates.

4. Join it all together
Business products should be designed to be easily integrated together. Some of the best can connect to more than 300 other add-on applications or software products. So you instantly have access to 300+ extra features that could be ideal for your business. You can build a solution that suits you perfectly.

5. Scale it up easily
If business is booming and you’re taking on more staff, no problem. It should be easy to add more users to cloud-based business software – and the best accounting software allows you to add unlimited users for free so that your business can grow with you.

6. Benefit from a fast-changing market
It’s a great time to be a user of business applications, because the market is changing so fast. Thousands of developers are competing for your business, trying to create the best software for you to use. No other software market offers such a wide range of business tools, and it’s growing all the time.

7. Access your software anywhere, anytime
Many of the better products are cloud-based, which means you can access them from your laptop, desktop computer, tablet or smartphone. This lets you keep up to date with your business wherever you happen to be, any time of the day or night.

Make custom business software work for you
So the key benefit of cloud-connected products is that you can shape the software around your business – instead of trying to shape your business around the software.

With a little thought and planning you’ll be able to buy the tools you need to manage different parts of your business. Then you can join them together easily so they share data with each other.
Why buy an off-the-shelf suite when you can buy individually-crafted product instead? Scalable, connected and regularly updated – cloud applications offer a better way to run your business.

Call us today to see how we can help to make custom cloud business software work for you.

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.

Thanks for Xero for providing this article

Xero Quick Tip – Multiple Emails, One Invoice.

/in /by

[dt_sc_one_half first]

[/dt_sc_one_half]

[dt_sc_one_half]
Here is a quick Xero tip for today. How to add multiple invoices to a contact to enable the invoice to be sent to all email addresses. Take two minutes to learn this time saving tip.

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.
[/dt_sc_one_half]

Lost in Venice: How Software Support Helps You Navigate a New Application

/in , /by

Have you visited Venice? Rising out of the Venetian Lagoon like a dream, Venice is a tangle of enchanting laneways and canals lined with Renaissance-era palaces and churches. It is beautiful to behold and ranks as one of Europe’s most celebrated destinations. In Venice, there are no cars, tooting Vespas, or even bicycles. Visitors to Venice explore the city on foot or by water taxi or gondola.

Venice is a maze of anonymous streets. Very few streets have names, making most maps essentially useless. One of the great pleasures of Venice is to toss away the map and simply lose oneself in this magical labyrinth. But if you are trying to find your way back to your hotel at night or trying to find your hotel fresh off a train from the mainland, Venice’s no-name streets can prove frustrating.

Navigating a new software application can feel a lot like being lost in Venice: lots of beautiful dazzling features, but when you are trying to get from point A to point B and encountering dead ends at every turn, things start to lose their lustre.

Every software application comes with its own bible to study: a veritable paper storm of how-tos and FAQs. There are online forums, hours and hours of instructable videos, and detailed infographics. It is the equivalent of navigating Venice using an unwieldy folding map and a Lonely Planet guide book that could moonlight as a doorstop.

A dinky-di Venetian, does not need a map to navigate his or her city and neither does a visitor. Getting to grips with a new software application does not mean slavishly committing to memory  every command and process. It is simply a matter of unlocking the logic that underpins the software’s design.

The logic that underpins the layout of Venice is simple to grasp and once you do the city is actually easier to navigate than a metropolis with street names.

Venetian addresses are different in that they do not locate a business or residence on a street but in one of Venice’s six districts, called sestieri. For example if the address of your hotel is 5609 Cannaregio, then your hotel is located in the district called Cannaregio, not Cannaregio Street–it doesn’t exist.

Using a starting point like a bridge or a water taxi stop at the edge of a particular district, it is simply a matter of noting how the numbers above the doorways change. Simply follow the increasing or decreasing numbers to find your hotel. A big change in the number, means you may have crossed into another neighborhood. Simply turn around and go back the way you’ve come.

The path to unlocking the power of a software application is revealing the underlying logic that informs how it is laid out. And to do that you need access to expert users who spend their days navigating the software.

Notch Above offers new Xero users as well as more experienced users valuable insights into how Xero works. Sign up for your personal training session with one of our Xero experts.  You can answer questions specific to your business one on one with us from the comfort of your office.  You will come to know Xero the way a local knows his or her hometown.

If you run into a dead end in Xero, we will turn you around and put you on the right course again. Think of us like a hotel concierge providing you with directions you need to explore the highlights of a foreign capital.

Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support.  Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns. 

Is My Data Really Secure with Xero?

/in /by

Given recent global events in which sensitive financial data was stolen, it’s no surprise that people are more aware than ever about the privacy and security of their information. One of the most commonly asked questions about the use of Xero for business bookkeeping is how risky is it. Believe it or not, using Xero is not only secure, but it can actually be safer than standard outsourced business bookkeeping practices. Here’s how.

Access and Password Protection – One of the things that makes Xero more secure than traditional outsourced bookkeeping is the way data is accessed. Rather than sending sensitive content via email, where it could be intercepted and stolen, your accounting professional can simply log into Xero via a secure password to view and work with all necessary data.

Data Encryption – On those occasions where data must be transferred, either between users or from the business into the programme, Xero uses the same high level of data encryption that is used for online banking.

Multiple Layers of Firewall Protection – We’ve all heard about the devastating results of hackers gaining access to millions of consumers’ financial information in recent months. Xero uses multiple levels of firewalls to protect against external access, proactively preventing this from happening to any of the data stored on their servers.

Server Security – With customer data stored on external servers, it’s critical that these servers be protected with the highest level of security. All of Xero’s servers are located in enterprise-grade hosting facilities, which are guarded by onsite security guards, 24 hours a day, 7 days a week, 365 days a year.

Regular Data Backups – Xero is constantly backing up all the data stored on its servers, including database backups every 10 minutes. This means your information can be quickly and easily restored in the event of a service interruption. These interruptions are rare, however with Xero boasting an availability rating of 99.99%.

Xero is Actually Safer…

You may still be asking yourself: wouldn’t it be safer to keep all of my financial information in-house on my own server? Isn’t turning over sensitive data to the cloud inherently risky? To the contrary, it’s actually a much wiser business decision to store your information in the cloud.  Provided that data is kept secure, which Xero takes very seriously, it’s also protected from loss due to technical problems, accidents or natural disasters.

Think about it. If you’ve got all of your critical financial data stored in your office on desktop software, what will happen to that data should your server crash or become physically destroyed by a fire or flood? When your files are stored with Xero, they’ll remain safe and secure no matter what happens in your office.

Now, more than ever, we are able to rely on cloud technology to help us do our jobs more efficiently and effectively. We use this technology on a daily basis, from surfing the web on our smartphones to streaming videos through our computers, tablets and even our televisions. Yet, when it comes to harnessing this incredible tool for business accounting, it’s only natural to be hesitant. The good news is if you choose to work with an accounting professional that uses a reputable service, like Xero, you can use the cloud to handle even the most sensitive of data securely.