Are you hoping to enjoy greater sales and success in 2017? Getting on top of your business finances is an important step in doing so. Here are seven New Year’s resolutions you can make to boost your business finances.
Improve your invoicing system
You’re more likely to get paid on time if you follow a few simple invoicing rules. Send invoices as soon as you deliver a product or complete a service—you’ll get paid faster that way. Make sure your invoices are easy to read and that key information such as date payment is due, amount due, and how to make a payment are visible at a glance. Confirm the contact information for the specific person who should receive the invoice, and send it directly to him or her.
Follow up on invoices in a timely fashion
Use your accounting and invoicing software to automatically remind you when invoices are due so you can follow up as soon as they are late. This will give you plenty of notice if a customer is going to have trouble paying the bill, so you can use alternate means of getting paid, such as invoice financing, to eliminate cash flow gaps.
Conduct thorough credit checks
Many invoicing and cash flow difficulties can be eliminated if your business performs systematic credit checks on new customers. The three major credit agencies that monitor business credit are Experian, Dun & Bradstreet, and Equifax. You can conduct online credit checks through these agencies for a fee; higher-level subscriptions, which provide more detailed information about potential customers, are worth the cost if they protect you from poor decisions. If a new customer’s credit rating is less than stellar, you can take steps to protect yourself by requiring cash upfront or partial payment in advance.
Never do business without a contract
It may be tempting to rush into a new deal right away based on a verbal understanding or email exchange. Slow down! Conducting business without a contract increases the risk of misunderstandings or worse, not getting paid. Your contract should clearly state payment amounts and terms so that both parties understand their deliverables and responsibilities. The contract should also cover what will happen if the customer cancels the order, the work is not up to par, or other problems arise.
Simplify your business finances
Are you still working with unnecessarily complex processes, such as using separate accounting and invoicing software, manually entering financial information into your accounting system, or not accepting electronic payments? Start 2017 off right by talking to your accountant and/or banker about how to streamline your financial operations. For example, electronic check deposit, financial software that imports your bank transactions automatically, and accepting mobile payments can make life easier (and get money into your bank account faster).
Stay on top of your cash flow
Monitoring your business’s cash flow on an ongoing basis helps ensure you always have the money you need to achieve your business goals. Use accounting software that integrates with your business bank account in real-time, and it will be simple to see where your finances stand at any given moment. Review your cash flow statement at least once a week—more often if your business is going through a financially sensitive period, such as a season with slow sales or higher-than-usual expenses. (Read more about how to give your business a year-end cash flow checkup and how invoice financing can help with seasonal sales
Always have a financial backup plan
Every small business runs into a cash flow crunch at one time or another. That’s OK as long as you have a backup plan to handle it. For instance, registering for invoice financing from Fundbox is fast and free. Just sign up and connect your accounting software. Fundbox advances money on your outstanding invoices; you can get 100 percent of an invoice’s value deposited in your bank account as soon as the next business day. Fundbox doesn’t charge origination or early repayment fees, and your customers continue to pay you—so they’ll never know you’ve used invoice financing.
Start now to implement these seven steps, and your business will enjoy a more profitable 2017.