Smart Billing Practices for Small Business
When just starting out in business there are many things which are not known that can hinder a business’s cash flow. By incorporating some of the practices discussed here
Requesting a Deposit
Depending on the type of small business you have started it is possible that you can request a deposit. Businesses such as designers, contractors, and many others many time request a deposit before starting a job. This is done for various reasons, for the purchase of materials, or to aid in the guarantee of full payment. While it does not always guarantee full payment those who make a financial investment from the beginning are more likely to pay for the completion of the job.
When requesting a deposit a small business should have a contract with the terms signed by the client. Those terms are than used to create a billing system with software. Using software for billing allows you to schedule a date for an invoice to be sent out per the agreement. This is especially beneficial if the terms consist of multiple payments. Software used for billing allows you to track the invoices that have been sent out and when the payment is received.
Billing Numbering System
Using a number system for billing in small business allows for better organization. Many software programs are already incorporated into the system, but you user can override them. It is important to set up a numbering system for billing when first starting your business. As your business grows it will be harder and more time consuming to incorporate. There are various ways to create a numbering system and choose one which suits your business.
In the medical field they use numbers and each number represents a specific service and what type of facility the service was performed in. Of course you don’t need anything so complex, but it may give you an idea of how you want to create your billing numbering system. Be sure to write it down or better yet create a Word Document. You can than print it out and put it somewhere where you and whoever else does billing can easily view it. This numbering system can then be incorporated into you software to create invoices making your billing easier and more efficient.
Incorporate Marketing into Your Billing Statements
Incorporating marketing into the billing statement is a trick that big businesses use to make more money. When sending out a billing statement, include a special, coupon code, or some other promotion to encouraging a client to do more business with you. This marketing technique can be incorporated into the billing statements easily with software. Small business can quickly become big business by incorporating marketing into the billing statement.
Subscription Billing for Small Business
If you are a small business that offers a variety of subscriptions it is important to set up your billing software for each subscription offered. At first this does not seem important and is easily handled. As your business grows it will be a huge task to incorporate the various subscriptions and clients into groups or categories. When you first start your small business based around subscriptions incorporate each group or category within your software from the start. This makes it easier for billing and keeping track of which subscriptions are more popular.
Monthly reconciliations should occur within all businesses no matter what size. It is particularly important for a small business where the owner is performing the majority of the work. The billing software is the most important part of any business and needs to be checked monthly. Using your credit card statements and bank statements compare them with the items in the billing software. Make sure that all amounts are accounted for and accurate. Record any questionable details and check them out immediately. Conducting a monthly reconciliation allows you to spot any billing errors or invoices that for whatever reason did not get sent out. I know you are saying I don’t have time for that I have a hundred other things to do. Small businesses can easily hire someone once a month to come in and do this task for them.
A small business is a great adventure, but not when mistakes are made. It can become frustrating and leave some thinking what did I get myself into. Using these billing practices will allow your business to run more smoothly.