As a small business owner, relationships with your customers and vendors are at the core of your success. No start-up or small business can thrive without positive referral relationships. Paperwork is what documents these relationships so don’t let it get in the way of maximizing your business. Here are a few tips to help you stay on top of your bills and invoices:
Right out of the gate, create a system to track the details. Whether it's through Wave Accounting or some other means, make sure that the system is setup and ready to go BEFORE you start doing business. Best practice also suggests that before you start plugging away, you should have your system reviewed by a bookkeeper or an accountant.
For bills, know who you owe, how much, and by when. Keep a summary of these basics readily available and review them regularly. For invoices, you should do the same. Knowing your cashflow off-hand will help you strategize in other business areas. Finally, you never know when a vendor or customer might call, and not acknowledging the facts (I owe you money, you owe me money) can create an elephant in the room of an otherwise productive relationship (fun fact: Wave tracks all of this for you).
That said, you should still schedule time on a regular basis to fully review your accounts payable and accounts receivable reports. The timing of this review depends on the nature of your business and whether or not you’re having cashflow issues. Nonetheless, you should plan to look at the numbers on a regular basis so you can anticipate problems and catch them before they turn into a write-off on the receivables side, or a dispute with a vendor.
Think through your expenses for the next few months. Then, compare your expenses to your estimated revenue. This will not only help you to stay on top of your invoices and bills, but you may be able to set stronger, more realistic financial goals for your small business.
Ask your vendors and customers how their experience was in working with your company — and cherish any feedback. For your customers, specifically: Did they understand the invoice? Was it clear as to what they were paying for? If the communication is unclear or inconsistent, the business will falter. Make sure you're doing your part by taking care of your billing and invoicing with thoughtful awareness and precision.
Mathew Heggem is currently the President of The Bookkeeping Company of New York City (TBCNYC). Since 2001, TBCNYC has been serving NYC's small businesses and nonprofits with cost effective bookkeeping solutions. Prior to his life as a bookkeeper, Mathew was a non-profit communications and development specialist, social media consultant, an entrepreneur and (will always be) an artist.