Running a small company is no easy task. You have to keep up with everything going around so that you are always ready to act if something goes wrong. One of the most critical aspects is looking at your finances in an objective way to establish which areas could bear improvements and modifications. One of the essential aspects is processing internal and external payments. Keeping both up to date is important for the well-functioning of your business and having your accounting balances in perfect order when you need them.
The best way to ensure a sturdy process is to use technological advancements to pay for everything on time. For your customers, a billing reminder system could work wonders for reminding them to pay their overdue invoices to avoid additional fees. For your business, the advantages of prompt payments include a reputation for reliability, the loyalty of your suppliers, a low creditor book, avoiding potential litigations and getting better terms moving forward.
But if you’ve been on the fence about which steps you should take to improve your payment processing pragmatically, here’s a list of strategies you should consider.
Eliminate Paper
One of the best ways to make your system more efficient is to eliminate the need for paper and create a fully digital invoice system. While tech solutions have become increasingly popular over the last few years, many businesses still use paper documents in areas where they could have been eliminated long ago. Paper invoices take up an unnecessary amount of space, and they’re also easier to misplace or become damaged, leading to wasted time down the line as you have to remake the same processes again and again.
Timesheet Portal is an online management system that helps speed up your pay and bill cycle, enabling you to manage contracts and projects in real-time. It can also shorten payment times and prevent errors, making it more efficient and cost-effective. Streamlining your processes helps you create stronger relationships with suppliers, shareholders and partners as you avoid late fees and the problems associated with them.
Tracking and storing are also much easier when your procedures are online-based. There’s no need to have space dedicated to keeping office mail and documents, and there’s no risk of duplicates and uncertainty. Checking everything becomes faster and easier, so you don’t have to look around for hours to locate a document.
Budgeting
Looking after your finances is vital for any enterprise, but it becomes all the more important if you’ve set your sights on accelerating and improving payment processes. Organizing your internal budget and keeping everything well-organized will enable you to have a successful relationship with your stakeholders. If you exceed your internal budget limits and there are no funds left to pay suppliers, that is an obvious sign that your business could end up in trouble.
When you look after your budget, you create a realistic and comprehensive picture of your finances. The best way to run this assessment is by breaking down your expenses and the predicted cash flow. Cash flow forecasting is imperative because it estimates your future sales and fees. Having enough cash going around to allow you plenty of freedom of movement is essential, as it is the best way to foster company growth and help develop your business. Looking after the cash flow also enables you to establish where there’s more money going out of your business than in.
You don’t need to go to great lengths to look after your budget. All you need is a simple spreadsheet. There’s also budgeting software and apps that can help you make the process easier.
Set Up Reminders
Being on time with payments is very important. However, with so much to do and your schedule as packed as it is, it’s easy for charges to slip your mind and to realize that you’re running late only when you’ve exceeded the deadline. Setting up simple calendar reminders can remove this concern and ensure that you’re always paying by the due date. It can also help you keep track of all your payments. Chances are that you have to pay on different timelines, so keeping up with everything can become challenging sometimes. On-time payments will strengthen your relationship with suppliers and wholesalers and send a message that you’re committed to delivering a high-quality business experience to anyone who works with you.
There are many ways to achieve this step. The most straightforward is simply adding alerts on a digital calendar. Some systems have built-in reminders, and you can opt for one if you feel comfortable. However, regardless of which method you choose, it’s important to set up these reminders with all the relevant information and the final due dates, so the process is fully optimized.
Streamline Workflow
The accounts payable workflow refers to the process of obtaining services and products, as well as invoice payment and processing related to the transactions performed to get them. There’s no single way to achieve this. There are several processes that you should include, such as:
- Tracking supplier data: there’s nothing quite like measuring company success as having a comprehensive look at data, including the info related to vendors and suppliers. Renewals, deadlines, bulk purchases and such can be valuable when there’s time for a contract renewal.
- Invoicing: This is the backbone of the payable department, so streamlining it can significantly impact your company.
- Selecting vendors: Finding the right companies to work with is challenging. Don’t compromise; look for those that offer you precisely what you’re looking for.
- Reporting: Keeping accurate records of your accounting and reporting accordingly when payments are concerned makes it easier to run your accounts. Having a centralized location where all members of your team can track expenses is also particularly helpful.
Keeping track of finances is a prerequisite for any business that wants to succeed. One of the most critical aspects of this is looking after your payment processing practices. Making sure everything works optimally in this area will help you achieve new heights.