Monday, 8 November 2010
1. You need to be sending out your invoices in a timely manner.
The easiest way is to get into a routine... either every 'Friday' or on the 1st of the month or the 30th of the month - whatever date / dates work for you - send out the invoices you have. Do not fall into the trap 'when we've done the work' - as that could literally be every day, and it's too easy to 'forget' to invoice for a job.
2. Send the invoice by mail & email.
Email will get there quickly... but don't forget to put one in the mail aswell. A lot of people don't view the emailed invoice as being 'the real deal' and often ignore it. And even if they do get it, they'll still ask for one to be posted out to them - so don't wait to be asked for the hard copy (and thus delay payment further) - get the invoices out in both formats, speedily.
3. Don't forget to include your payment terms!
On your invoice - make sure you include HOW you'd prefer payment and BY WHEN. If you'd prefer a cheque, make sure you note "Please make cheques payable to ..." And if you'd prefer a BACS payment - do include your sort code and account number - and the name of the bank. It's amazing that people still omit these basic details... and won't why people take so long to pay them.
Give no-one an excuse to not deal with your invoice quickly.
Tuesday, 27 October 2009
There are still some people creating their invoices on Word. Why? An accounts package can (at the click of a button) create your invoices. There might be a bit of setting up of the template to do - but once you've adjusted the logo and the font to exactly how you like it - it will save you a LOT of time and energy!
Boogles run bookkeeping courses, and have bookkeeping CD's which go over how to adjust reporting, to get the desired effect that you want.
Lots of people are not fully aware of all of the functionality of their accounting software. If it can handle budgets, then its best to use it, rather than a spreadsheet.
Take the plunge - learn the software. Be it Sage, QuickBooks, MYOB, Mahmut, Kashflow, Microsoft Accounting, Kashflow (mycake)... or any of the other ones out there, on the market.
Sunday, 18 October 2009
Small businesses often ask, “Do I need an accountant or a bookkeeper?”. The answer is normally, “both”.
Accountants & Bookkeepers have some overlap in what they do… they both might do the payroll, they both might do the VAT returns… but then the accountant does higher level activities than a bookkeeper. I always compare it to a Doctor and a Nurse. A nurse can do a lot of what the doctor does… but a doctor (like an accountant) is more qualified.
But bookkeepers and accountants, essentially do different things and have very different roles to play in helping businesses to manage their finances properly.
Bookkeepers charge far less for their time. Far less. That’s is a principle difference between a bookkeeper and an accountant. Therefore, it makes sense to get a bookkeeper to do as much of your work as they can. Bookkeepers record the financial transactions of a business and present them in a neat and orderly format – which could be on accounting software such as Sage, Quickbooks, MYOB, MyCake or on a spreadsheet. This information is then used to complete the VAT figures.
Bookkeepers tend to work on-site, with their sleeves rolled up and as a result, they’ll spend more time with your business and really get to know how it ticks. They are more down to earth, and tend not to speak in jargon, and so can tell you plainly – what the figures say.
Some will take over the task of credit control - chasing customers for payment. It is always better to have a different person trying to sell a service, from the person collecting money.
Accountants do not normally want to provide an ON SITE bookkeeping service. What they do best is to take the figures from the bookkeeper and then complete the year-end accounts and other formalities. They will advise you on exciting things like ‘succession planning’ and ‘exit routes’ and how to ‘save on tax’.
The best advice, as in most other matters, is to make sure that you use the correct person for the job. Both bookkeeper and accountant should be qualified and be up to date in best practice in their respective professions so that you can rest assured knowing that your business is in safe hands.
Above all, make sure your bookkeeper and accountant talk to each other and get on with each other. They should be in agreement over the best accounting system for your business.Getting it right from the offset will mean that you have regular information about your business that you understand from your bookkeeper and reduced annual fees from your accountant. So the question should not be “Do I need an accountant or a bookkeeper?” but rather “Have I got the best bookkeeper and best accountant for my business?”
Contact Boogles, for a good bookkeeper.
Wednesday, 7 October 2009
I had a call from a client last week. Unfortunately, he’d had to put his business into administration, and was starting again…so was ringing me to explain the situation. A few of his clients had gone bust on him - but one in particular owed him almost £10,000, and that had left him in an impossible situation. I asked him - what 3 things have you learned from this experience. His answers were:
1. Just because someone is ‘posh’ doesn’t mean they’ll pay you. So don’t just accept people at face value. Get payment up front wherever you can.
2. Don’t spend the VAT money. Put it away into a separate account. (Our bookkeeper used to tell him this, but he didn’t listen).
3. Don’t take too much money out the business. There’ll be nothing left. (Another thing our bookkeeper warned him about).
Sometimes, you might be accustomed to a lifestyle… but in business, if things aren’t going so well, you need to either a) adjust your lifestyle or b) improve the business because, there isn’t a bottomless pit. And the definition of insolvency is: ‘Unable to pay your debts as they fall due.’
Fortunately, for us, he was on our standing order scheme, and our bookkeeper always made sure our bill was a priority… and he’s a decent bloke. But who has gone bust leaving you with bills you now can no longer meet? This is the knock-on effect of the credit crunch.