Category: Accounts Department

Seven Tips To Get Clients To Pay On Time

A healthy cash flow is vital to your business so getting clients to pay on time is key. Your business, irrespective of size will struggle if your customers don’t pay their invoices promptly. To see the money rolling in on time, you will have to set systems in place, which make it simple for your clients to pay you. In Business-to-Consumer (B2C), it is usual that customers pay for their goods and services immediately. However in Business-to-Business (B2B), you will have to invoice them. In this article, team4 gives you seven of our top tips to speed up those incoming payments to give you the best chance of getting your clients to pay on time. These are some of the most effective ways that we use and they won’t compromise your relationship with your .

How to get your clients to pay on time

  1. Set out clear payment terms – immediate or specify the number of days
  2. Invoice as soon as possible – clients can’t pay until they receive an invoice
  3. Organise payment administration – there is a process to being paid
  4. Reward early and on time payments – think of a discount to encourage speedy payment
  5. Offer a recurring payment option
  6. Add payment options directly into the invoice
  7. Embrace payment technology – use accounting software that is the most suitable for your business

  1. Establish clear and exact payment terms

 

Sometimes clients don’t pay you when you think they should because they don’t know your terms – you haven’t told them. Add a contract section explaining exact payment terms, ways of paying, date payment is due and any other details that may be relevant. Discuss this with your client so that there are no misunderstandings. Ask customers if a specific invoice format is required or if they use an in-house system.

 

  1. Send invoices as soon as possible

 

In order to get clients to pay on time, send invoices as soon as possible. Once the client receives the invoice, your payments terms will kick in. It’s also acceptable to send gentle reminders. This could be to let your client know that the payment date is looming. If you take advantage of technology, this can be done automatically and this way you won’t appear pushy.

 

  1. Payment administration must be organised

 

Depending on the size of the business you are invoicing, there will be a chain of command. This will start with the person who deals with payments, the person who approves the work and finally the person who pays it. Make sure all the necessary people receive the invoice.

 

  1. Reward early and on time payments

 

Incentives can work really well and a discount for a prompt payment such as 5% might encourage people to pay. You can try to be quite creative with this. Conversely to discourage late payments, you could add an interest or late payment fee.

 

  1. Offer a recurring payment option

 

With some clients, you may offer the same services each month with the same payment due. An automatic payment could be set and here you won’t have to worry about invoicing dates. If the invoice varies slightly each month, you can still set this system up. Let the client know the base amount that will be going out each month and notify them of any additional costs before you add them on.

 

  1. Add payment links directly into the invoice

 

Lots of clients do want to pay on time and so you must make it as simple as possible. Opening up another browser, logging into an account before money can be sent may become tedious to the customer. If your invoicing system supports it, integrate payment links/buttons directly into the invoice. Clients can then pay via digital payment gateways such as PayPal or GoCardless.

 

  1. Use payment technology

 

In this digital age, e-invoices are normally sent. These are easily done with the technology that is available today. Using accounting software, invoices are sent out immediately via email. This has the added advantages that records can be kept more easily and payments can be tracked seamlessly.

 

How can bookkeepers get clients to pay on time?

 

One of the many roles of a bookkeeper is to prepare invoices and send them to your clients so payment is received on time. They will also manage the accounts receivable ledger and chase up any late payers. The easier and more convenient you can make the process of paying invoices, the better.

 

How can team4 help you with invoicing your clients?

 

As bookkeepers, we specialise in getting clients to pay on time. We are here to streamline your payment processes. Our bookkeepers use a variety of accounting software so that customers are billed quickly with payment terms clearly stated. And we chase up any outstanding invoices so you don’t have to. We are pretty rigorous when it comes to chasing outstanding invoices and use accounting technology such as Sage, QuickBooks and Xero to automate the process. Our aim is to keep your financial stress to a minimum, so you maintain good relationships with your clients and have a strong cash flow. For help with your invoicing, please get in touch with team4, call us on 01825 763378 or email info@team4bookkeeping.co.uk.

What Is An Accounts Department?

An accounts department, sometimes referred to as the finance department provides accounting services and financial support to specific businesses. It can be internal or external and is responsible for a wide range of things. These include accounts payable and receivable, inventory, managing payroll, data input and credit control. In fact, all financial aspects of your business. It’s impossible for a large business to operate efficiently and more importantly profitably without one being in place. When you set up in business, you may find that initially you do not require a whole department. However, all of the elements that an accounts department handles could be applicable in a smaller way. Our latest article looks at the definition of an accounts department and what it deals with. We also discuss why using Team 4 Solutions could be the perfect answer for small business accounting and bookkeeping.

Accounting department definition

Part of a company’s administration that is responsible for preparing the financial statements, maintaining the general ledger, paying bills, billing customers, payroll, cost accounting, financial analysis, and more. The head of the accounting department often has the title of controller.

Accounting Coach

Accounting and Bookkeeping – the section of a company that deals with the accounts.

The Free Dictionary

The department in a company or organisation that prepares its financial information.

Cambridge Dictionary

What does an accounts department deal with?

  • Accounts Payable and Accounts Receivable
  • Payroll – to include bonuses, benefits, sick leave and time off
  • Credit Control – to include cash flow and use of accounting software
  • Reporting and Financial Statements
  • Taxation and VAT
  • Expenses

 

Accounts Payable and Accounts Receivable

Accounts Payable (AP) are payments to outside partners for goods or services whereas Accounts receivable track monies coming into your business for goods and services from clients and customers. This is key to calculate the profit or loss your company is making and should trigger opportunities to improve on the situation. It is often referred to as ‘balancing the books’.

Payroll

This will ensure your employees are paid accurately and on time. It will include commissions, bonuses and benefits that are due to them. Another key function is recording employees’ time off from work, holidays and sick pay. Our recent article about using a payroll specialist will give a lot more information on this topic.

Credit Control

Monies coming in are essential for a healthy cash flow, but getting your customers and clients to pay on time is a challenge. Nobody really likes asking for money so you need an accounts department that will set up a smooth credit control process. This means that someone else will be chasing those outstanding invoices. Systematic records must be kept of your company’s financial transactions and here accounting software is used which could include QuickBooks, Xero, Sage or other customised systems.

Reporting and Financial Statements

Financial information is collected in order to prepare accurate financial statements and reports. This allows companies to make more informed business decisions, forecasts and prepare budgets. It also determines profit and loss. Your accounts department will prepare end of year financial statements and reports to include balance sheet, income statement and cash flow.

Taxation and VAT

If you have a large company, you will need a taxation department. All decisions made by your business will have tax implications which will need to be identified and incorporated into financial planning and decision-making processes. Funds need to be available to pay HMRC at the right time. Evasion of tax is illegal and there are tough penalties so you will need your tax department to make sure laws are complied with. Legal compliance is key so that your business stays compliant with relevant financial laws. You’ll also need to register your business with HMRC is your VAT taxable turnover is more than £85,000. You will be responsible for charging the right amount of VAT, paying VAT due to HMRC, submitting returns and keeping VAT records and a VAT account.

Expenses

Your business will have various running costs and some of these can be deducted from your taxable profit as long as they are allowable expenses. These include office, travel and clothing expenses, costs of business premises and advertising, marketing and training courses. However, this is a complicated issue and next month, our blog will be all about this topic and will include capital allowances which is when you buy something you keep to use in your business such as equipment, machinery or business vehicles.

How can Team 4 Solutions help you with your accounting?

Keeping up with your business accounts and bookkeeping on a daily basis is time consuming and challenging. However, by doing this, it will ensure total transparency in all financial transactions. For smaller businesses, it would not be feasible to have a department and it may not warrant a full time member of staff. That’s where outsourcing your accounts can be invaluable and cost effective. You may just need someone to work on your accounts for a half day a week or longer and using the outsourced option of Team 4 Solutions will allow you to have that flexibility. We are here to set up the accounting systems to meet your unique requirements and provide a support service for your small business acting as your data importer and credit controller. We’ll also work seamlessly with your accountants. For more information, contact us on +44(0)1825 763378 or email info@team4bookkeeping.co.uk