Workflows and Alerts. Your accounting system has workflows and alerts. Just ask your vendor or partner. If it doesn’t try purchasing an external alerting software like KnowledgeSync or consider writing a SQL trigger (if you don’t know how, ask a SQL expert). An alert will send you a text or email whenever something happens in your system. A workflow will initiate follow-up tasks for that same event. So whenever you create an invoice how about getting an alert a few days before it’s due? Or if a promised order is late in shipping how about an immediate follow-up task for the project manager? Or if a customer’s credit balance goes over a certain amount he and you get a text message? These are ways to keep track of transactions that will ultimately affect how you get paid and therefore improve your cash flow. And it can all be done automatically.
Mobile And Online Payments. If your business relies on sending people out in the field to do work then you should also equip them with mobile payment technology like Square or GoPayment. That way when the work is performed you no longer have to send an invoice and sit around waiting for collection. Your crew chief or salesperson can swipe the customer’s credit card and you get paid immediately. Yes, the transaction fees can be steep (2-3% in some cases). But when you compare with the time and expense required to collect from those certain difficult-to-find customers the net cost may be very well worth it. The same goes even if you’re not at your customer’s location. Create an online invoice using products from Intuit, Freshbooks, Invoice Bubble or others. That way you can email them a link to the invoice which has already been setup to receive a credit card online and hence significantly reducing your collection efforts.
Document Management. Most states today allow for electronic signatures. And there are many great services that provide you with the opportunity to take advantage of this change. You may have seen this already – real estate agents for example like their buyers and sellers to sign off on electronic documents. So why not you? Two great services are DocuSign and EchoSign. You can upload your quotes, service contracts, legal agreements and other paperwork up for your customers to review and electronically approve. This way you’re not wasting time mailing or faxing or emailing documents back and forth. And because the paperwork gets completed quicker the entire sales process speeds up and you get paid faster. Translation: better cash flow!
Your Financials. Reading your financials isn’t anything new, but today’s technology makes it easier. Set up your software to get key reports automatically emailed to you. Utilize dashboards too if you find them easier to read. Have a daily flash report which shows cash, receivables, payables, year-to-date sales, purchases and payroll, and any other key info about your business. Keep a close eye on these metrics and cash will take care of itself. Also…read your general ledger every month. I mean it. It’s boring, I know, but it’s important. You will find transactions hidden in your expense accounts that you forgot about. You will learn something new every month. And finally, try to create a rolling forecast, if only for 2 months. Take your year-to-date income statement, put it on a spreadsheet and look forward 60 days. Use your backlog for sales. Extrapolate your overhead. Consider any unusual purchases coming up. This will help you manage your cash much better.
June 19, 2013