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How Financial Software Can Make Collecting Payments Less Stressful
By admin | May 21, 2009
A common problem and potential pitfall for many small businesses is collecting money from customers for services performed and/or delivered. Often, the time and energy spent tracking down delinquent payments returns no value and is simply lost production time. Even if a client pays after their due date, the time spent getting that money is always time spent losing money.
However, businesses armed with a good financial software package can solve this problem easily. How? By improving and automating communication with customers, reducing your need to spend time tracking down late payments.
A quick review of various financial software reviews online will help you identify a software package with the accounts receivable functionality to automate this process and stop wasting your time on it.
Accounting and other business software have tools in place that improve the communication between a business and its customers. These tools automatically update key accounting reports and send emails to customers when changes to projects, budgets, etc. are made. This reduces surprises at the end of the project and the associated risk of delinquent payments or invoicing issues.
The first tool that you should look for is a quoting feature. This is particularly important for those in a contracting business.
Advanced quoting software will generate quotes that are as accurate as possible for your potential clients. Too often, a quote that is created by hand is too low and the company is forced to either earn a lower profit or deal with some very mad clients. Software that tracks costs in real time will always be able to generate the most accurate quotes, and will do so much quicker than one can do it with a paper and pencil.
Once a quote is given and the project is completed, an invoice is sent to the customer. Again, accounting software can be beneficial here by automating this process.
The right accounting software will automatically update the accounts receivable portion of your accounting system once an invoice is created in the software (since an invoice is a reflection of money owed).
While these features make the software worth it, the real benefit of accounting software comes in to play after an invoice is sent out. Most programs will then track payments received and can be programmed to send reminders to clients that have not paid – without requiring any tracking or input from users. They system will know if a client has not paid within 30 days, for example, and will automatically send them a reminder to pay you after 30 days. This will repeat until payment is received. This significantly reduces the time that you have to spend investigating who has paid, who hasn’t, and when each payment is due. Once services are paid for, the reminders will automatically stop sending and the balance will be transferred from accounts receivable to revenues.
The end result is a software package that makes day to day operations much easier and less stressful for the everyday user. The software offers a much more effective and efficient manner for following up with and tracking down clients that owe money.
Most financial software will also track client payment history. This allows the business to identify clients that are regularly late or on time with their payments and can provide strategic guidance for the company as to which clients are worth doing further business with and which ones are not.
What this provides for your company is better automation of processes and an improvement in your efficiency. By spending less time worrying about who owes you money and tracking them down, you will be able to spend more time on value-added activities for your organization, resulting in a higher performing business overall.
Topics: Business and Management | 0 Comments