How to improve your company’s AR process

Have you ever looked at your aging report with high hopes that your over-60-days and over-90-days columns would just zero out this once? I have, again and again, and I’m pretty sure I am not the only one!

What’s happening with these clients? In this blog post, we’ll talk about the most common reasons these balances persist and how you can get them to approach zero the next time you look at your report.

Billing Surprise!

The first reason is all about communication. Customers often suspend payments when a bill doesn’t jive with their expectations. A surprise is fun on birthdays and holidays, but never at billing time. If the amount that’s billed is higher than what the customer was expecting, then that can delay or jeopardize your payment.

If you’re new to the accounts receivable role, or are part of a newer business where invoicing is part of getting paid, billing with confidence and consistency is somewhat of a learned skill. Stay in communication with the client throughout your service period—especially if the bill or the project scope begins creeping up. Use a change order to gain the client’s approval for new costs that were not agreed upon in your original contract.

I had a client in Asia that wanted additional work done that was originally in the project scope but was cut due to budget concerns. I was already onsite, halfway around the world, when this came up. It would have been easy to just do it, but I held my ground, presented a change order, and it was not approved. This provided me with the ammunition I needed to say no to the extra work and avoided all sorts of issues with billing.

Invoice Lost

Playing lost on a TV show makes for great drama, but having your bill lost is not the type of drama you want in your business. Often with billing systems that send invoices via email, invoices become innocent victims of your customer’s SPAM filters. In other cases, a billing address or contact might have changed and caused a billing disconnect.

A helpful invoicing practice can be to request confirmation that it has been received by the person at your customer’s office—i.e. the accounts payable contact, finance manager or another person responsible for payments. If that’s not possible or not appropriate for your business, the next best thing is to follow up about a week before each of your invoices become due to ensure there are no barriers to an on-time payment.

Can’t Pay or No Intent To Pay

In some cases, vendors can’t or won’t pay.

An effective credit process early on can help root out these vendors before you do business with them. If the amount of the bill is significant to you or your business, run a credit check before you do the work.

For commercial companies, check out Dun & Bradstreet, and for individual credit reports, you can go to Experian, Equifax, and TransUnion.

If no report is available, it is common to request three trade references and a banking contact that can verify basic details about the customer before you start doing the work. In some cases, the best risk mitigation tool is to request that your customer pay 50 percent upfront.

And be careful. I’ve had clients tell me stories that a new client’s deposit check bounced after the work was done. The solution to that is to make the client wait as long as the bank makes you wait.

Simply Forgetful

Perhaps your client has a lot going on. Small business owners are often in their forties and fifties, a time in life with a great deal of responsibility—children, aging parents, and their own business to manage. It doesn’t take much to overwhelm these people. A friendly reminder might be all that’s necessary to get your bill back on their radar screens.

Disapproval or Disagreement Regarding Deliverables

You strive to do a fantastic job for each client, but what happens when a client disapproves of the work you did for them? This, and other scenarios involving a disagreement about deliverables, can be a common reason for a payment’s delay and can represent an uncomfortable situation for both you and the client.

Most of us dislike confrontation, and we procrastinate rather than taking the first step in the confrontation. Once you’ve discovered that the bill is late because the client is dissatisfied, you can make it easier on the client by inviting them to share their concerns— and then listening as objectively as you can. This will begin the dialog that needs to take place for compromise or settlement.

Make it common practice in your business to request feedback throughout each project (and especially at completion) to ensure your customers are happy with your work.

Approaching Zero

Making big gains in your accounts receivable balances won’t happen overnight. Commit this month to identify a few key areas of weakness in your processes—and then take action. A few small steps each month might allow you to look up a year from now with a whole new outlook on your business.

Have other ideas that have helped you make improvements to your company’s AR process? Please share them!

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When Do You Hire an Employee or a Contractor?

For growing small businesses, being able to outsource is a flexible and cost-effective way to get the help you need to run your business.

Here are some criteria to consider when evaluating whether to outsource a function or activity or whether to hire an employee.

Consider the Duration of Your Needs

Carefully examine how long you need for the help will continue. If you are merely looking to staff a specific project , outsourcing to a contractor is the hands-down choice.

In addition to project work, independent contractors can be ideal in other situations where flexibility is top of mind:

  • When your business is growing but you’re still not sure enough of your future revenues to justify hiring a “permanent” employee.
  • During economic downturns – it’s easier to turn the switch on and off for a contractor if you have to scale back on expenses. Whereas, once you hire an employee it is emotionally, legally and financially more difficult to terminate that employee if you have to cut expenses.
  • When your needs spike due to a temporary or seasonal fluctuation – if you tend to have higher needs during the summer, for instance, a 3-month contractual arrangement may be just what you need.

Consider Your Budget

  • Compare costs. Generally, hiring an employee adds another 30% – 40% on to your costs due to workers compensation, benefits and other expenses, above and beyond salary or hourly rate. So, if you are comparing costs between hiring an employee and outsourcing to a contractor, be sure to compare apples to apples. Add in that additional 30% – 40% on top of the employee hourly or monthly rate. This article at the NFIB contains a good example of how to compare the costs of a contractor to hiring an employee.
  • Determine the breakeven point. Comparing costs will also help you determine the breakeven point of the number of weekly or monthly hours at which it becomes more expensive to use an outsourced provider. Once you cross over that breakeven point, if your needs are going to continue indefinitely or if you expect your needs to grow, that’s when you should consider transitioning to an employee. You may simply have outgrown your independent contractor for a particular function or task.

What Skills Do You Require?

An independent contractor is ideal when you need specialized expertise or skills. Often as a small business it is difficult to find and hire subject matter experts as employees.

That’s especially true because small business and growing businesses often have needs for 8 or 10 different skillsets – from bookkeeping to SEO to software development to marketing. But you may not need any of those skills full time.

It would be virtually impossible to find a single employee capable of the level of expertise you need in each of those areas. By hiring several different independent contractors, you are able to get the necessary skillsets, within your budget.

How Much Management Time Can You Spare?

When you outsource to a contractor, you do not need to manage the day to day activities of your contract help. This is heaven-sent for small businesses, because small businesses tend to be lean on managers.

On the other hand, when you hire employees you will have to devote time to ongoing day to day management. Giving work assignments, handling performance issues, training, and so on all take time. Be realistic. If you don’t have the time to spare for such management tasks take a strong look at outsourcing.

Remember that when you get an independent contractor, you typically are paying for an existing level of expertise in a particular field, not an entry level or “green” person. Plus the management is somebody’s else responsibility. You can expect a degree of independent execution that you often would not get with an employee.

Watch out for a Big Gotcha

Be careful to structure your arrangement so that you don’t hire an individual as a contractor, when that person really is an employee. If you are a U.S. employer, take a look at the 11-point IRS test for determining an independent contractor versus employee.

One way to minimize risk is to hire contractors who either (a) work for another company that is in the business of being a service provider, or (b) who are freelancers or sole proprietors, but who and take on other clients in addition to you. That way you’re hiring contractors who truly arrange their work as contractors, not as employees in disguise.

That’s why hiring an independent contractor through a marketplace such as Elance can be perfect. You’re much more likely to find contractors that serve multiple customers and make their living as outsourced providers.

In conclusion, consider all the advantages you can get through outsourcing. Outsourcing can be a cost-effective, flexible and easy way to staff a growing business. With outsourcing, you get a lot of benefits, without taking on extra headaches and workload you may not need or want, or which can distract you from important work you need to do to grow your business.

How I Organize My Entire Business

In this blog post, I'm going to show you how I organize my e

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Best ways to build your network.

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Why Google gives priority to websites having quality content?

Why Google gives priority to websites having quality content

Top Web 2.0 Programming & Design Skills

I am sure many of you have heard the buzzword “Web 2.0”. For many, it may have been from people or design companies that say make sure your website is Web 2.0! In truth, Web 2.0 isn’t a new form of the internet. It is simply a word describing a trend that has been around for the last few years.

In short, a Web 2.0 website focuses on user experience and interactivity, allows users to share content, and is powered by a backend database.

For your next website, it’s important to know which technologies are associated with Web 2.0 as well as how each one can help you. In this article, I will describe each of the key technologies as they relate to user interface, search engine optimization and databases. 


One important concept of Web 2.0 is user experience – a good and user-friendly design is vital for any successful website. If you are trying to have the edge in the market, you need a design that is intuitive, easy to use and makes the user feel comfortable.

Once a designer creates a webpage design for you, a coder has the task of converting the design into a functional website. In order to do this effectively, and “Web 2.0”, the coder will need the following skills:

1. XHTML 1.0

What you see through your browser and the majority of websites you visit is a form of HTML, the programming language used since the early days of the internet. HTML has become the most widely used language for web pages. As developers and coders have become more comfortable with the language and design requirements have become more demanding, HTML has been upgraded, in a sense, to become more robust and flexible.

Today, with the internet delivered through browsers on many different types of devices including computers, mobile devices, cars, TVs, kiosks, etc., XHTML is the chosen successor of HTML 4.

The advantage of XHTML 1.0 is that it combines the strength of HTML 4 with the power of XML. XHTML is more strict than previous versions of HTML which makes it more compatible and easier to use with programming languages and databases. So when you are working with a designer or a coder, it’s important to specify that you would like your webpage to be ‘XHTML compliant’.

2. CSS

Cascading Style Sheets (CSS) is a fancy term to describe how web designers separate the layout and look and feel of a webpage from the content. Basically, CSS allows designers to match the design needs by creating a CSS file that holds all the information about how a website should look. This might make more since if you imagine this blog without CSS – it would be all text, wouldn’t have any colors, wouldn’t be spaced well, etc. … it would simply be the text you read, without any formatting.

What’s great about CSS is that you can create a CSS file that contains all the styling and layout information for your entire website. Let’s pretend for a moment that you had a website with 100+ pages. On each page there is a menu on the top. The buttons in the menu are green. If you wanted to change them to red, without CSS, you would have to open EACH of the 100 pages and change the color. With CSS, you would only open one file, and make a quick change and that change would be applied to every page.

I can’t stress the importance of a talented CSS coder. It’s one thing to create a CSS document, but another to create one CSS document that allows your webpage to look the same on Internet Explorer, Firefox, Safari and Opera browsers. This wouldn’t be important if every user that was going to see your website was using one form of the browser, but as I mentioned before, your users will be accessing your site through mobile phones, different internet browsers, TVs and more. So clean and compliant CSS code is a must-needed skill. That said, most if not all designers who use XHTML, will use CSS as well because they go hand-in-hand.

For a great place to see how CSS can dramatically change the look and feel of a website, visit CSS Zen Garden.

3. JavaScript

JavaScript is the most widely used scripting language on the internet, and is used mostly to add interactivity to web pages. It can also react to events on a web page. For example it can do something once a page loads, or validate a form once a user clicks “submit”. Because a user can disable JavaScript in their browser, it’s important to think about how JavaScript can be added and also that it’s not used just to be used. Rather, it should be used to enhance the user experience of your website visitors. Keeping focus of who your potential visitors are will help curb unnecessary implementation.

Pretty much all websites use JavaScript. Some web pages that use JavaScript that you might be familiar with are: eBay’s registration form – try clicking submit without filling in anything – and Amazon’s left-side menu – it gives you more options when you rollover a category.

4. Ajax

Ajax is an acronym for “asynchronous JavaScript and XML”, and is a skill people frequently associate with Web 2.0. It is used to increase the performance and experience of websites by allowing direct interaction with a server, without having to reload a web page. It will also send and receive small parts of a website rather than an entire page.

With Ajax, developers are making web applications function more like desktop applications, thus making web applications more rich and user-friendly. And because Ajax is becoming more popular, there are many available frameworks to help developers with implementation.

Some examples of Ajax are Google maps, which uses Ajax to load the content of your map. Another good example is Yahoo! If you start typing in a search in the top search bar, Yahoo! uses Ajax to find possible terms you may want to use.


1. SEO

SEO is a term used to describe the methods used to increase the ranking of your website pages on popular search engines. Finding a good SEO consultant is crucial to your new website. Be patient though, as a new website can take a little time to get the traffic and ranking results you want.

2. XML

Within the realm of SEO, there are things that should be done internally to your website to ensure that web crawlers such as Google and Yahoo! are able to index your site properly. One method of getting your site crawled and indexed is using a sitemap. A sitemap is a file, usually generated in XML, that contains links to every page of your website, as well as information about those pages, such as the last time they were modified and how often they change.

Another important use of XML, and maybe the most popular use, is generating RSS feeds. I am sure you have seen RSS icons on your favorite sites that allow you to “subscribe” to their feed. If you have a blog or provide news, an RSS feed is a must. It will help with your website circulation as well as visitor retention.


A key aspect of any Web 2.0 website is that it is backed by a database, as well as a server scripting language to talk with that database.

A database is where information can be stored. The data is stored in tables, with rows and columns. A website will usually have many tables making up the database, and they are typically organized in a way to increase website performance (responsiveness to traffic).

A server scripting language runs behind the scenes on web pages. When you load a dynamic web page, it will first pull information from the database, and then convert that data into HTML so that your browser can interpret it. It is important when finding a database designer to ask them about their methods of improving performance. A badly designed database can make your site slow and put a heavy load on the server.

There are several options for both the database and scripting languages, and I will briefly describe the most popular options, however, keep in mind that most ordinary projects could be handled using any of the technologies. I recommend that you describe your project to a programmer to ask which type of database and programming language they recommend.

1. MySQL

The most widely used open-source database in existence today, MySQL, can be scaled to handle small or medium websites, but also has the power to handle databases for the big boys. Just look at their client list. MySQL is free to use, and there is plenty of support and documentation.

2. SQL Server

Microsoft has their own proprietary database solution called SQL. Many larger companies use SQL because it’s backed by Microsoft. SQL developers may be a little harder to find and can be more expensive.

It’s difficult to say which is better – my SQL or SQL Server – or which you should use because they each have their benefits. MySQL usually performs better, while SQL is more impervious to data corruption. Again, I would recommend asking a professional what the best solution is for your project. Keep in mind that your budget may be a deciding factor.


A Web 2.0 website isn’t complete without a server scripting language. Basically this means every time a page is loaded, the script on the server will retrieve information from the database, manipulate or format that information, and then display it in a readable format on your browser. This process is usually very fast.

There are many choices for server scripting technologies. Like I mentioned before, the needs of your project and your budget mayl be determining factors for which one will suite you best. I will briefly describe the most popular options:

1. PHP

I start with PHP because it is by far the most widely used. It’s open-source (free), has an excellent community of developers, and is easier to learn than other languages. Sometimes larger companies shun PHP because it isn’t backed by a large company like Microsoft. However, this isn’t always for good reason, as PHP as proved time and time again that it can be just as effective as the other options.

PHP can run on many different platforms, and is compatible with most operating systems. It’s important to find a PHP programmer that is experienced with optimizing PHP so that it runs smooth and fast.

Large websites currently using PHP are and Yahoo!.

2. ASP and .NET

Like SQL Server, ASP was created by Microsoft. It’s a very popular scripting language today, and is trusted by many websites to power their content. It isn’t cross-platform compatible, meaning you will need a server using a Microsoft Operating system to run it.

Large websites using ASP are and Virgin.

3. JSP

A scripting language for the web built on Java, JSP is another approach. It’s more difficult to learn then ASP and PHP, especially for people without scripting experience. Also, creating a simple website with a database using JSP would probably be overkill. It runs slower than PHP and ASP and uses more resources, so using a shared sever wouldn’t be a good bet. There are definitely reasons to use JSP, but again I would recommend first defining what you are trying to accomplish and ask a professional for advice on implementation.

4. Ruby

A scripting language becoming more and more popular is Ruby, or Ruby on Rails. Ruby simplifies the process of programming because of its flexible framework. There are claims that developing with Ruby is 10 times faster than developing with other scripting languages. Like PHP, it’s open-source, or free. It’s been around for a couple years now, so finding a server that can host it is much easier.

Websites using Ruby are YellowPages and Twitter.

How I Organize My Entire Business

In this blog post, I'm going to show you how I organize my e

How you can influence somebody with a simple phrase

Now, I came across this study and this study is quite eyeope

Best ways to build your network.

Let's talk about the number one best way to build your netwo

Why Google gives priority to websites having quality content?

Why Google gives priority to websites having quality content