4 Instant Tricks to Stop Burning So Much Money and Increase Your Business’ Cash Flow
MISTAKE 1: NOT LINKING YOUR BANK TO XERO
Why?
You could miss the moment a customer pays, or worse, not notice if they don’t pay, and you could run into cash problems by using old data, instead of real-time updated information.
To do:
Imagine logging into an app every day that has pulled bank transactions from your online banking system. This means you can instantly match incoming and outgoing payments from your bank to your customers’ bills and any payments due to vendors, such as hosting costs, contractors, etc. Xero Touch works on IoS and Android and provides a real-time manual update of your business finances, meaning you can be anywhere in the world and never be in the dark.
MISTAKE 2: NOT BILLING YOUR CUSTOMERS ON TIME
Why?
There’s nothing worse than getting the job done, getting sidetracked on the next job, and forgetting to bill the first job. This can cause cash flow problems if it spreads to more and more jobs, but all too often we find that people are literally too busy with work to act.
To do:
1) For one-off projects, when you agree on the initial fee for the job, create a quote in Xero that you can then convert to an invoice with the touch of a button when the job is done; Y
2) For regular or recurring jobs, subscription revenue creates a recurring invoice in Xero, which means the invoice is issued every month until you tell it to stop. As an example, our bills come out on the 1st of every month while we sleep!
MISTAKE 3: NOT SENDING YOUR BILLS TO THE RIGHT PERSON
Why?
If your clients are small businesses, this won’t be a big deal since the person you agree to do the work for will likely pay the bills as well. Imagine, however, that you are dealing with much larger companies, with multiple sites, multiple departments, and running crazy bureaucratic processes. If you don’t send the bill to the right person and department, it just won’t get paid when you need it.
To do:
When the fee is agreed with your contact, get details on how the invoice will be paid, specifically whether the invoice needs a reference to your system (for example, a purchase order), and details of who the invoice should be sent to by email. email (never post). An invoice when it can be sent by email!). Then email the Xero invoice to your contact and payment department and attach all supporting documents to the invoice when you submit it.
MISTAKE 4: NOT FACILITATING THE PAYMENT OF THE BILL Why?
Your customers are busy people just like you. What would you do if you received an invoice without bank details? You would inadvertently procrastinate and say, “I’ve got to check that out” without ever doing it, because a million other things come up.
To do:
Xero now allows you to insert a “pay now” link on your invoice. So when the email is received (see Mistake 3: Never send anything other than email), the recipient can see the backup copy of the invoice and an extremely useful button that allows them to pay with literally a few clicks. Imagine getting paid within an hour or so of billing! We recommend that you set up a PayPal or Stripe account for credit card payments and GoCardless for bank transfers to offer as many options as possible.