Small Business Owners often forget that being organised and structured is financially smart and sticking to those structures will, in the long run, guarantee that your business is flourishing.
Losing or simply forgetting about invoices on the other side is pretty expensive – overdue invoices that don’t get paid just because you can’t find them in your pile of documents, are bringing your small business one step closer to having to get a loan to pay your own bills.
Being organised doesn’t mean you have to spend hours at your desk, in fact being organised leads to less time in the office. It just means you have to allocate a certain amount of time at a certain time to
a certain task, like looking into your finances.
If you have a routine, for example to review your bills due dates and other appointments every week, you can easily follow up and get your accounts organised in just one hour a week.
Many small business owners, do not invoice their customers straight away but wait until “they have time”.
You should make a habit out of invoicing your clients once you’ve finished a job or a target is met. Remember, you worked for that money already, you’ve done your part of the deal.
If your accounting software doesn’t support setting a due date to be reminded about outstanding debts, use a free project management tool such as Trello or simply the calendar on your phone to get reminded.
Making a habit out of always using the Fridays in a week to be the due date on your invoices makes it easier to identify overdue bills. And at the end it doesn’t make much of a difference if you allow your debtor to pay within 14 or eg. 17 days.
If you don’t use an accounting software like Xero or myob try to organise your invoices in seperate folders, eg. one folder for unpaid, one for paid, one for overdue.
As soon as an invoice is overdue it should be chased. Chances are that your business partner is just as unorganised as your were. And if you don’t have the time to do it yourself, let Sally help you out.