As a business, it is important to have constant cash flow, for numerous and obvious reasons. Regardless of your size, poor cash flow management can have a detrimental effect on your business success. Strong billing procedures can be a major turning point to improve your cash flow and can significantly contribute to financial stability. Below are some reasons how you can improve cash flow using this process.
As soon as you need to, as an accountant you should be billing your clients as soon as possible. Don’t leave yourself waiting around for payments and encouraging delays because time will only grow and you never know how long you could be waiting. All bills sent should have a date sent, date of payment expected and date of service clearly stated. Once these have been sent, paid or are in process, you should send regular statements making your clients aware of the monies owed and monies already paid.
As a successful accountant you should also never give the impression that you are not in a rush for payments. By being relaxed with payments, your clients have the impression that they can pay whenever they see fit, not when you should have it.
There are various techniques you can follow to change your billing strategies including:
- Time served fees where you can charge your clients on a time-served basis
- Fixed fees where you will agree with your client on a payment plan and then break the fee into smaller monthly payments
- Payments on accounts that are paid before you start any work
- E-Billings end payments via email to reduce the time that normal paper billing takes
In all cases it is important that you agree all payments with your clients before anything is ‘set in stone’. This gives your clients confidence in your services and also avoids any payment disputes at the end of the process.