Getting paid as a business owner: the essentials
Many new business owners and freelancers lose out because they do not optimize their business finances. You can make the most of your accounts receivables in just three stages:
Record all your sales and receipts on a daily basis to ensure your records are up-to-date and correct.
Create and issue regular invoices for each sale and statements for each client.
Track balances against all accounts to keep abreast of payments due, payments made and any overdue balances.
To get paid, you need to create and issue invoices. The invoice can be sent on dispatch of goods or completion of services. It details the debt incurred, listing each cost directly to an individual product or service, and requests payment from your customer. The invoice is important in proving the debt and is a legal document. If you manage your invoices effectively, you will be paid on time and your bills can be paid on time as well. For many business owners, however, finance is not their area of expertise.
Using a template ensures that you present a consistent brand and allows you to extract information from multiple clients for market research. Does this sound like too much work? There are tools and technologies to help set up and manage your invoices; it does not need to take too much time or effort, and the benefits outweigh the costs.
The internet is a great source for advice and tools. Online services can help simplify the invoicing process by offering templates that you can print and send or issue electronically here. Each template can be quickly modified to match your brand and present a consistent and professional face. Everyone benefits from timely payment, and it is not as complicated as you think, especially with a selection of templates on hand.
Failing to manage your accounts receivable can cost time, money and even your business. Can you imagine what would happen if you did not know what sales you had made, who you had invoiced or whether they had made payment? If you do not have control of the money coming into your business, you cannot control the money going out. If you have control, you can even raise money for your business using your accounts receivable.
To make the most of your invoices, they must be professional, clear and consistent. Your invoices must contain key information, such as the following:
A breakdown of products or services, including the date provided, rate or quantity.
Your terms and conditions, including when payment is due and any penalties for late payment.
How to make the payment, including the method of payment and the amount due.
Using your invoice template, you can establish policies on providing credit, methods of payment and invoicing intervals. You can include details of discounts for quicker payment, for example, which can help to incentivize fast payment from your customers.
In summary, taking control of your invoices gives you control of your business finances, and that is key to the success of your enterprise.