Accounting, Bookkeeping, and QuickBooks Tips for Small Businesses

Posts tagged Small business tips

4 Easy Steps to Collecting your Accounts Receivables

All small business owners and entrepreneurs know cash is king. You need cash to run your business. Whether it’s ordering inventory, purchasing supplies, paying payroll, covering your utilities, investing back in your business, and paying yourself. I was shocked to read an article from the AICPA’s blog about a survey conducted by SageWorks. The survey found that the typical small business has at least 40% of their assets tied up in Accounts Receivable. Wow, that’s a lot of financing to their customers! Here are 4 easy steps to collect your accounts receivable quickly.

  1. Be In Touch With Your Customers
    Don’t be afraid to pick up the phone and contact your customers. A simple and friendly call to remind them about their outstanding invoices can go a long way. Another great way to remind customers of their past due balances is to send monthly statements. I recommend sending monthly past due statements at the beginning of every month. Add it as a task to your calendar and stick to it. Then the customers who are still outstanding by the middle of the month, give them a call. It’s a lot easier to collect newer receivables than the older ones. So being in touch with your customers sooner than later will almost always pay off.
  2. Take a Look at Your Accounts Receivable Policy
    • Not all of your customers are the same. Yes, if you are working with large corporations, it typically takes the standard 30-45 days for them to issue payment. If you work with smaller companies, try adjusting the payment terms. Is it possible to have your invoices due within 10 days, 20 days, upon receipt, etc?
    • What about charging a retainer payment – your customer pays half up front and the other half when you deliver the product or service.
    • Another great option is offering prepayment discounts. Many times you will see invoices with 5% discount if paid before 30 days. There are a lot of small businesses out there that love reaping the benefits of paying early to get discounts. Why not entice them to pay your bill early too!
    • Contact your bank and get set up to accept automatic draft payments or credit card payments. You can sign your customers up to have their monthly fees be directly debited from their bank account on the 1st of each month or you can automatically charge their credit card the 1st of each month (or whatever day you choose).
    • Don’t be afraid to charge late fees. Keep in mind some states have credit laws, so you need to make sure your financing fees are in line with the state and federal laws. Typically you need to have the late fees spelled out in your contract and listed on your invoices. That way there are no surprises to your delinquent customers.
  3. Not Everyone Has To Be Your Customer
    Don’t be afraid to turn away customers that you get a bad gut feeling about. Maybe you know the potential customer doesn’t have the funds to pay or maybe you’ve done this type of work in the past and have been stiffed more times than you would like to admit. If it doesn’t feel right, it probably is not. Why waste your time and resources doing work when you do not think you will get paid. Instead, kindly turn down the work. If you really want to do the work, make sure you collect the payment up front.
  4. Double Check Your Invoices
    Don’t forget to double check the invoices you send to your customers. Set up a procedure to have them looked over before sending or a few weeks after they have been sent, if payment has not been received. I know I’m guilty of this too, taking longer to pay on incorrect invoices. We are all busy, but don’t make your customer have to make time to correct your billing mistakes. This will almost always result in a delay in you getting paid.

These 4 easy steps should make collecting your past due invoices easier and quicker. Bottom line, being active and managing your accounts receivable will help turn those late payments into cash in your bank account. Eventually word will get out that your business does not mess around with accounts receivable and your customers will start a habit of paying you on time, if not early!

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle Edwards, CPA is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and Virtual CFO solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, home brewing, quilting, and hanging out with her family.

Customer Service – 5 Tips from CarMax’s Gas Station Ad

My husband is a huge football fan. So needless to say yesterday’s “Big Game” was an important part of our weekend. I’m learning to love the game, but honestly, my favorite part of the super bowl is the ads. Yes, the entrepreneur in me watches the ads and thinks, what can I learn from this ad and apply to my business.

CarMax’s Gas Station commercial is priceless. They play off on the 1950’s gas station attendant and superior customer service from back in the day. Not only does this commercial make me laugh (I’m being car jacked! I’m being car jacked!), but it also makes me think about how horrible customer service is these days. 5 customer service tips come to mind when I watch this commercial. Think about them, could they be the key to improving your company’s customer service?

  1. Quick to Serve – How many times have you walked into an office, up to the counter, or pulled into the drive through and not been helped right away. The worst is when the employee looks at you and then goes back to what they are doing without acknowledging your presence. After a few minutes, they finally look up and are ready to assist you. Horrible service. The first lesson in this advertisement is to offer quick service. As soon as the car pulls into the gas station, the attendants run out and are ready and willing to help the customer. Being quick to serve your customers should be a top priority for any company.
  2. Service with a Smile – This is a favorite. Anytime you speak with clients, customers, vendors, etc. you should always do it with a smile on your face. It is always so depressing to be served by unhappy employees. Your customers can tell who enjoys their jobs, who has respect for their managers, and which employees care about your business. It shows in your employee’s actions, facial expressions, and attitude. Service with a smile can make the difference of your customers coming back or giving their business to your competitor down the street who offers friendly service. You don’t have to be as cheesy as the eager to help gas station attendants, but service with a smile is really nice, is appreciated by customers, and is noticed by customers!
  3. Anticipate You Customer’s Needs – Most businesses track their customer’s ordering habits, how they click around on your website, and their customer’s likes and dislikes. This is a great tool and allows you to offer customized service to your clients. Which in return, makes your customers feel special and they want to come back again. However, there’s a fine line between this type of service being helpful and personalized vs. becoming scary and frightening to the customer. With the commercial in mind, the gas station attendants should ask the driver 1. When was the list time you had your car serviced? Would you like us to check your oil levels? 2. What a snowy week we’ve had. The snow always makes a mess on the windows. May I wash your windows for you? The gas station attendant is anticipating the customer’s needs, but without being creepy about it. You don’t want your customer screaming “I’m being car jacked! I’m being car jacked!”
  4. Make Every Client Feel Important – No, I’m not a celebrity nor am I rich. However, I still enjoy receiving the red carpet treatment. Who doesn’t? It makes us feel important, like our service is valued, and and that the company cares about our business and would like us to return. Go ahead, let your top 4 attendants race out to help your customers with quick, efficient, friendly, and attentive service. This red carpet treatment does not cost that much more and it will ensure that I become a repeat customer! If your company does pay a bit more for that red carpet treatment for all customers, I guarantee it’s cheaper then trying to attract new customers. Think about it – not only will I return and give you more business in the future, but if I receive red carpet treatment you better believe I will be telling my friends about it on Facebook, Twitter, blogging about it, at book club, and everywhere else I go! Please, make every client feel important, even the little ones!
  5. Provide Quick and Top Quality Service – I love how efficient the gas station attendants are! Not only do they run out to the car, but then wipe windows, polish the chrome, and check the oil quickly and in an orderly fashion. Today, everyone is in a hurry and needs to get to their next destination 5 minutes ago. These gas station attendants get that. They have 2 minutes to complete their tasks before your car is full of gas. They get right to work and work efficiently. Keep in mind the other piece, they do not skimp on the details nor do they offer sloppy rushed service. Sometimes finding the balance is tricky, but it’s a good balance to find. Train your employees how to offer quick and efficient service while still focusing on the details. This top quality service is sure to pay off.

Focusing on customer service is an easy and inexpensive way to create value for your customers. Look at what your business is currently doing and compare that to some of your favorite places to shop, dine, etc. What can you learn from your competition, from the restaurant down the street, or from this commercial? There are many small things that can be changed or tweaked that will have a huge impact on the way your customers are treated and in return view your company. Go ahead, focus on your customers. You won’t regret it!


Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.