You may have heard the old adage, ‘Everyone knows a sale isn’t a sale until you invoice’. But do they? It can’t be said enough how important invoicing promptly is for your business. Doing so decreases the time it takes to receive your revenue which means it’s a major contributor to good cash flow.
So how does your business send invoices? Are you using an invoice software package? Invoice software can pay for itself and improve your business performance through decreasing the time it takes your debtors to pay. The benefits of invoice software over sending them via email are easy to quantify. The days spent waiting for your mail to be delivered are lost days in terms of getting what you are owed. Emailing an invoice allows for your debtor to receive it instantly. This means that while they may not pay straight away, the payment process and terms have started immediately.
There is however even more benefit to be gained from invoice software than just emailing invoices. After all you can use applications like Microsoft word or excel to prepare invoices and email them to your customers. Invoicing software can speed up the process with automated invoice numbers, customer and line item selection at the click of a button. What’s more your VAT rates can be set up within the software so you can select which rate applies to your different products and let the software complete the total for you. When you’re finished all you have to do is email straight from your software.
When your customers do pay you will be able to allocate the revenue against your invoice, keeping all of your records in one place. This means that nothing gets lost and you have an accurate picture of your accounts so that you can see how your business is performing.
So ask yourself how many invoices does your business raise in a week, or a month, or a year? If you could cut down the time it took to process each invoice by only 30 seconds how much time would you save to look after other things in your business? Invoice software can make that a reality.
Big Red Cloud Book of Accounting Blunders
Here at Big Red Cloud we’ve put together an interesting compilation of bookkeeping errors from some of the biggest names in business. These are 10 lessons that startups and SMEs alike can learn when it comes to running their businesses.