The first essential aspect of any business is that it offers a product or service that other companies or people want to purchase. The second most important aspect for any business is collecting payment and making a profit. A failure to make sure your customers pay can quickly kill a business. Any shortfall in cash turnover can easily cause financial problems when an unexpected bill comes in. If you are short of money and cannot pay a supplier, for example, then the business may not gets the source materials it needs to continue in business and meet customer commitments.
Tracking who has paid or not paid you for work you have performed can soon become tricky and difficult if you have several customers owing money at the same time. A paper-based, manual system of tracking payments can operate successfully if you have only a handful of clients for whom you regularly work. If your business becomes larger, with more regular customers, or you make frequent deliveries requiring separate invoices, you soon end up needing to think about purchasing software to help you manage the process of invoicing clients and tracking who has and hasnt paid.
Doing your billing by hand, its easy to make mistakes in presentation or in entering and adding up amounts to include on the invoices. Any mistakes may end up delaying payment or even causing you to get paid the wrong amounts. Sorting out invoice payment issues can be a headache, taking more of your business time, for example in issuing credit notes and reissuing invoices and reimbursing payments.
There are a range of decent, reliable and capable billing packages on the market. A quick search on the internet will soon find 20 or more packages to choose from. A day spent picking a billing package to evaluate will be time well spent. A good invoicing package will guide you through entering the essential data onto an invoice, such as the correct customer address and product descriptions. The better invoice packages will allow you to specify payment terms, showing the last date by which you expect customers to make payment.
The better invoicing programs will use the invoice date and payment terms info to remind you when payment is overdue if you havent recorded the payment by the invoice due date. Soem packages will also create customer statements and ageing reports summarizing the amounts of money a client owes you and the age of the original invoices. A lot of businesses automatically issue customer statements on a monthly basis to remind their clients the amount they owe.
As well as providing reminders that invoice payment is due, any invoice software package should allow you to quickly and readily contact the customer to chase payment. This can be implemented in a number of ways, for example by storing the customer addresses in a database together with their contact details and email addresses. A number of packages will provide one click access to sending an email reminder which can often be a good way of chasing down payments against invoices.
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