One of your duties as a small business owner is to make sure you’re getting paid. While it’s not the most glamorous task, it is one of the most important. That’s why it’s imperative that business owners become accustomed to keeping an eye on your accounts receivables.
The problem with staying on top of accounts receivables is that we’re constantly distracted. Business owners also have a lot on their plate, so accounts receivables sometimes falls to the wayside. Here are x ways to stay organized so you can stay on top of your accounts receivables.
Try something manually.
A couple of months ago, I started a new habit to keep track of accounts receivables. Fair warning, it’s pretty old school but it works.
At the end of each day, I pull out a moleskin notebook I use to track the money in my business. I write down exactly how much I can bill that day and who the client is. I also write down how much money was actually paid to me that day and where it came from.
This is easier for me than using online software because sometimes software has delays. Since I have an accountant doing my bookkeeping, I also don’t do my own reconciling so sometimes the information may seem off.
There’s also something about manually writing numbers down that makes it stick for me, but maybe that’s just me.
Put in systems that make it easier to get paid.
Another method for staying on top of accounts receivable is making it so that you have less to keep track of. Read: Make it so that fewer people owe you money.
One way to do this is to use an invoicing service that automatically sends out invoices and follow-ups. You also may want to consider offering different payment methods so that clients pay you faster.
If you’re using a shopping cart of any kind, set it up for automatic payments. For example, for the business consulting side of my business all clients are required to sign up for automatic billing. No invoicing required on my side and I actually get my money on time.
Review your accounts receivables regularly.
The last step is to review your accounts receivables regularly. This is where an online service comes in handy because you can see who paid and who still owes.
As much as we may think we got everything, we probably missed something. For example, I recently moved and had to have my mail forwarded. During this time, I completely forgot about a check that was owed to me and had to follow up on it.
Additionally, sometimes we may have payment systems in place, but your client’s credit card may have expired. When that’s the case, you need to do your due diligence to get the updated information.
Final Thoughts
Accounts receivables may not be fun, but they are a necessary part of running a successful business. Don’t just rely on other people or online services. Instead, go the extra mile and take a look yourself. You’ll likely find something that was missed.
