In a recent study, it was found that cash flow is an ongoing problem for one in five small businesses, whereas fifty percent of small businesses experience infrequent cash flow problems.
With competent accounting software, enhancing your collection times and reducing cash flow problems is a matter of establishing the logic for a rational and automated collections method once, rather than taking on tedious accounting tasks time again and again.
In order to find the software able to remove cash flow issues, you should look for the following features:
1. Support for different payment alternatives
In general, whatever your company sells or advertise, anything you can do to provide customers with payment flexibility will help you get paid quicker. Without correct planning, though, supporting less important payment platforms can create extra administrative work, which may hold up entire collection efforts. Accounting and billing programs with local support for different payment options or strong APIs that allow for simple incorporation can help keep receivables updated.
2. Easy email invoices
Even the most fundamental and commercially present invoicing software nowadays will make it simple to send email invoices to customers. When you are able to correspond to the balance due faster, you are able to get paid faster. It is as easy as that. Issuing quick email invoices can rapidly cut two to three days off your “Days Sales Outstanding”.
3. Penalty management for late payments
Integrating interest on the basis of late fees for payments beyond their due date is a significant approach for encouraging timely payment. Although, calculating late fee payments manually when customers go beyond Net 30, Net 45, or whatever terms you fix is no fun at all. But, again, even basic business accounting software should allow you to simply evaluate late payments.
If you want to make sure that important customers who generally pay on-time are not hit with infuriating fees, you will want to look for a billing program giving configuration alternatives or an approval method related to late fee evaluation.
4. Automatic reminders
Leaving reminders to your billing software is a much better option to ensure that they get delivered.
Billing programs with the complexity to allow provisional logic for which letters should be delivered, when, and under what condition, will make sure that constancy in delivering reminders is balanced with the proper amount of discretion in your collections messaging.
5. Untimely payment concessions
For itself, early payment discounts can be a better way to incentivize timely payment. Giving terms like 1/10 Net 30 is a normal technique to get clients paying quicker.
Most billing systems can simply support untimely payment concessions. But, making the accounting adjustments essential to apply cash discounts can be burdensome.
Overall, programs that offer tools specially designed to update the process and involuntarily apply the accounting adjustments essential will help in keeping the time used up on non-revenue producing managerial work to a minimum.