Cash flow management, keeping track of the money that comes in and goes out of your business, is an important measure of the success, solvency, and the health of your business. For any business to survive, it is obvious that there needs to be as much or more money coming in as there is going out. Your incoming cash flow will become unmanageable if you have to deal with customers who are slow in paying their bills.
According to Entrepreneur magazine, before the financial crisis of 2008, only 2% of business owners said that their most challenging problem was getting paid by their customers. By 2009 the response was 12.8% and in 2010, 14.1% of businesses replied that getting paid was a most challenging problem.
None of your legitimate customers would intentionally make a deal with you if they did not intend to pay you, but as experience teaches us: stuff happens. And once a payment is late, the customer begins down a slippery slope of deciding that actually paying you just is not that important. When that happens you are in real trouble.
The two most important factors to avoid being victimized by slow paying customers are to deal with customers who you know are able to pay their bills, and to aggressively manage your invoices and receivables. Both of these are exercises in information management, which means that your Cloud consultant is in a position to help.
The first step of managing receivables is to know who owes you what and when it is due. The information that is managed with a cloud based accounting system like Xero or Quickbooks Online can be used beyond cash flow management, it can be an important factor in managing and updating your supply chain as well.
A tool that we have seen success with is Debtor Daddy. Not only will the system keep you up to date on which of your clients have a payment due, it sends out timely reminders so that they won t fall into an overdue situation. The service is set up for customizing and integrates with your accounting software.
Several merchants have even automated their payment system using tools like eWay. This makes it even easier for your customers to pay you, and you can treat the payments like cash without having to deal with several different banks.
Your Cloud consultant can help you set up and get the most out of your invoice management program. The best part is that the tools that are customised for your business needs rather than a one-size fits all solution. Give us a call today so we can get started.