If it’s been a few years since the last time you’ve changed your accounts receivable processes, it’s time for a new look.  Here are five tips you can use to rate your own invoicing process.

1.      Invoice Creation

The best way to create all of your invoices in by the push of a button from one of about five types of systems that already have all of your data:

• Time and billing, if you bill hourly
• Estimating and project management, if you use proposals
• Customer relations management (CRM) systems that have invoicing as a feature
• Point of sales systems that track open accounts
• Accounting system that includes an A/R component

There are a couple of key best-practice concepts to follow at this step:

• Eliminate any duplicate data entry you can.  You should only have to enter your invoicing data in one place, and it should flow to every other system that needs it.
• Automate as much of the process as possible.  Never start in Word or Excel, because this always means duplicate data entry somewhere.
• Have an easy approval process so someone else can do the data entry if needed.
• Keep your invoice data real-time so you can benefit from the next step, which is….

2.      Invoice Delivery

How you create your invoice will vary by the type of business you have, but the main thing to make sure of is that the invoice is approved quickly and sent out to the client as soon as the work has been done.

The only way to do this is electronically.  If you’re still printing, stuffing, stamping, and mailing you invoices, you’re losing anywhere from two days to nearly a week before your customer even sees the bill.  Change that by using email or delivering the invoice electronically.

3.      Invoice Terms

When do you want to get paid?  Most people feel it’s realistic to aim for 30 days.  But if you set your payment terms to Net 30, you’re more likely to get paid in 45 days, not 30, according to recent research by Xero, where over 12 million small business invoices were reviewed.

Instead set your terms to 13 days or less, Xero suggests, because most small business debtors pay two weeks late.  Here is the infographic in case you want to check it out:  http://www.xero.com/guides/invoicing/

4.      Payment Method

How does your business rate when it comes to payment options?  If all you take is checks, you can add another week’s delay to your payment.  Instead, we recommend creating lots of choices for customers, such as taking:

• Credit and debit cards through MasterCard, Visa, American Express, and Discover
  • You can set up links online (best) or receive a fax or scanned form where you can enter the card into your back office.
  • PayPal
  • ACH for recurring payments that the client agrees to draft from their bank account
  • Checks

Your industry may even have more options.  For example, in accounting, Intuit has their Intuit Payment Network (IPN) where small businesses can receive money electronically and send and receive requests for money.  IPN is far cheaper than PayPal fees, too.

5.      Receipt

When you get paid electronically, it’s in your bank (or your merchant account) within minutes.  If you bank online, you can see things immediately now (it’s really amazing!).  When you receive a check, you have the overhead of preparing the deposit and making the trip to the bank.  If you have hundreds of paper checks, you also have additional bank fees incurred from processing the checks.

If your accounting system interfaces with your bank, then you save a lot of time and money not having to post those transactions.

Invoice-Free Zone

Why not get out of the invoicing business altogether by offering a pay-in-advance option?  Your Accounts Receivable balance goes to nothing, to name one of many benefits.  Not every industry can adopt this practice, but if you think creatively, you might find some ways you can implement this in your business.

How did your A/R process rate on the 5-point checklist?  Got some ideas for improvement?  As always, please reach out if you have A/R questions or if we can help you implement your best practice invoicing system.

1. Go to the Systems Preferences
2. Click the Mail, Contacts & Calendars tab
3. Add your Twitter account information (if you haven’t already)
4. Click Update Contacts button. Twitter will then use the email addresses and phone numbers from your Contacts to add the Twitter user names and photo’s to your Contacts
5. When the process has completed you will see an message at the bottom of the screen indicating how many Contacts were updated.
6. Now go to your Contacts app and skim through your Contacts list to be sure those updates were integrated
7. For those that were not picked up, you can manually add their Twitter information into their individual record. When you hover your mouse over the Twitter line, you will see an option to View Tweets or even send a Tweet to your Contact

Now the Jump to date tool bar will appear along the right side of your calendar.

Some key features:

• Receipt capture
  • Capture and store paper receipts by taking a picture from your phone
  • Add notes to your receipts to remember important transactions or indicate client associated with the expense
• Mileage Tracking
  • Track the miles you drive for your business
  • Easily calculates your tax deduction
  • Save starting and ending odometer readings for tax purposes
• Other key features
  • Email your tracked business receipts & miles to your bookkeeper
  • Store everything on iCloud for safe keeping
  • And its FREE!

Two Ways to Be in the Clouds

There are primarily two ways to have your accounting system in the cloud.  First, it can be “hosted.”  This means that the current software you are using on your desktop, such as QuickBooks or Sage, does not change.  Neither does your company file.

The only thing you do differently once it’s set up is click a different icon to start the software.  Once you log in, most everything else is the same.  There are a couple of differences in printer access, Microsoft Excel® access, and some of the other interfaces, but it’s essentially the same experience.

So if it’s the same, why would you want to move to the cloud?  Because it completely eliminates the passing back and forth of the file among you, your CPA, your bookkeeper, and anyone else that needs to update or access your accounting file.  No more restores.  No more DropBox or YouSendIt downloads.

Hosting saves a ton of time because the people you grant access to can login to your file from anywhere.

The second way to have your accounting system in the clouds is to switch to an online accounting system.  In industry jargon, this is called SaaS, which stands for Software as a Service.  Examples of online accounting systems include QuickBooks Online, Xero, Wave, and Kashoo.  These systems have fewer features and will only be right for a client with a need for a simpler accounting system.

When you switch from desktop accounting software to SaaS, it will likely require conversion, setup, and training.  It’s a major change.

Benefits

There are many benefits to moving to the cloud; here are just a few of the more common ones:

• Anywhere, anytime access to your accounting system.  Companies with multiple locations will benefit significantly from a hosted solution.
• No more worrying about who has what version and whether the changes the accountant made were updated or applied.  There is one central file, and multiple people can be accessing it at the same time as long as you have the right number of user licenses.
• No more software updates that you have to apply yourself or wait for.  This is done by the hosting provider or the SaaS.
• Tighter security for your data.  The data centers typically have multiple state-of-the-art data security controls and must pass a rigid audit, which is far more protection than any small business can afford to provide for their own data.
• Automatic offsite backup for disaster recovery purposes.

Concerns

Clients’ two major concerns include security, which is covered above, and costs.  When it comes to costs, the most important thing to look at is return on investment.  Will the time you save be of greater value to you than the costs of hosting or moving to a SaaS?  That answer varies for each client.

Curious About the Cloud?

If we’ve piqued your curiosity about cloud accounting, please feel free to reach out so we can continue the conversation.

You will be asked to name the icon and there you go – the website is now appearing on your iPhone.

There are a couple of companies that provide floppy disk transfer services to either a CD or flash drive. The companies:

1)  RetroFloppy.com –  They can transfer for both 5.25 and 3.25 inch disks. Their prices can start at $6.95 per standard floppy disk file extraction and conversion and their turnaround time is two business days.

2)  FloppyDisk.com –  They also can transfer both 5.25 and 3.25 inch disks. Their pricing is a bit lower than RetroFloppy, starting at $1.95 for 3.5 and $4.95 for 5.25 disks.

 Another alternative, visit your local library. It’s possible that they still may have an old computer still in use and will allow you to archive the files yourself.

1. Bloated Bank Fees

Some banks are more business-friendly than others.  We recommend you assess the fees you are currently being charged to see if you can discontinue any unnecessary services.

• Could you maintain a cash balance to avoid monthly fees?
• Are you being charged online banking fees and bill pay fees, and are these still necessary?
• Are you being charged for a high volume of transactions or cash drawer services, and are these competitive with other banks?

Banks, including national brands, that have not kept up with technology and have not automated a significant amount of their transactions are inefficient and must charge higher fees to cover their processing costs.  If your accounts are located at one of these costlier banks, you do have a choice.

2.   Overtaxed

Are you sure that you are paying the lowest amount of taxes you legally owe?  There are several places to look to make sure you have not overpaid taxes anywhere in your business or personally:

• Payroll taxes
• Sales and use tax
• Franchise taxes
• State and local income taxes
• Property taxes
• Federal income taxes
• Taxes that are specific to your industry

In preparing income taxes, a few of the easiest items to overlook include carryovers from prior years and new deductions you become eligible for.  If you received a large refund this year, congratulations, but that means you gave Uncle Sam an interest-free loan on your money.  You can do better next year by estimating your tax payments and paying only what’s due.

3. The Check Is in the Mail

Customers who take too long to pay you are big cash drains in your business.  Consider changing your terms, asking for deposits, or becoming more aggressive with collections to bring your DSO (days sales outstanding) down.  When you do, you’ll get an instant, permanent cash flow improvement.

4.  Sweat the Small Stuff

You may have an eagle eye on your largest bank account, but what about your other cash stashes?  PayPal, petty cash, and business savings accounts are among the places that may not get daily scrutiny.  Make sure those accounts are properly reconciled and have the proper controls in place so funds don’t go missing.

5.  It’s in Your Interest

A nice problem to have is when your bank balances get too large and you don’t need the money immediately.  Make sure that money is still working hard for you by putting the excess in an interest-bearing account.  It’s not much these days, but every little bit helps.

Make a Dash to the Cash

If we can help you plug any of these cash leaks in your business, please don’t hesitate to reach out and let us know.

Free Music Download Pro Plus will allow you to view that You Tube video or listen to that webinar you missed. The app has both a free version and a paid version ($3.99) and for a limited time the app is available for $.99.

The app has a built-in web browser so just cut and paste the URL of the file you wish to hear or view. You will have an option to either download or start to play the audio/video file. Other features include:

• Download Manager
• File Manager
• Playlists
• Media Play
• Media Library

Receipt Match helps you better manage all those paper receipts and reconciling your statement each month.

Receipt Match only works if you have an American Express business credit card.