Many small businesses struggle with clients or customers that don’t pay on time or do not pay at all. This poses a big problem for companies in terms of accounting for the cost to produce and sell the good without accounting for the revenue received from the sale.
Thankfully, a good accounting software package can help counteract and diminish the impact that non-paying customers have. How? Accounting software can help improve the communication between your company and your customers through the entire purchase process, with the goal of avoiding payment issues further down the road.
Accounting software with a good accounts receivable module is the cure to this kind of problem that many businesses face. If you find yourself dealing with more payment issues than you’d like to, perhaps you should begin consulting accounting software reviews to help identify a better software solution Accounting Software Reviews.
Most financial software includes communication tools that can be used to exchange information with customers easily and they can be set to process and send information sequentially and in real time. Better systems also integrate with accounts receivable modules that will show your accountant or accounting department that funds are due and can be counted as assets.
The first step and tool that most software uses is a quoting tool. This is especially useful in service industries where contracting is the main revenue producing part of your operations. If you are in this kind of industry, it is imperative that your accounting software has an accurate and reliable quoting tool that uses real, historical data and projections to produce accurate quotes.
Many companies run in to problems when they develop quotes by hand as they are often inaccurate, which creates problems when it comes time to bill the project to the client.
After a quote is given and the client accepts the proposal, the project is completed. Generally, an invoice is created and sent to the customer. Accounting software can simplify this process by creating the invoice automatically, sending it to the customer, and simultaneously inputting the information in to the accounts receivable module of the software.
The invoice (which represents money owed) is then automatically accounted for by the software on the balance sheet.
Finally, accounting software can be used to simplify the cat and mouse game of chasing down delinquent payments with settings that automatically send reminders to customers after so many days of being delinquent on a payment. Once a payment is received and accounted for, the software will automatically update the accounts receivable and revenue sections of the balance sheet to account for the cash received.
How does this impact the average business owner? Simply, it eliminates a lot of the stress of dealing with tracking payments and chasing down delinquent accounts. It provides an efficient manner to communicate past due balances to customers automatically, meaning it requires no additional time on the part of the business. Less time lost tracking down money is more time that can be spend maximizing profits.
The additional benefit is that the software will also clearly track the payment records of all customers, allowing decision makers the ability to identify clients that are not worth doing further business with as well as the clients that should be nurtured and cared for the most.
The main benefit of accounting software programs is that they automate the tasks that commonly slow down businesses and really have no return on the time spent. The time gained by automating these processes will add value to your organization in the form of more time spent on value-added tasks.