What are your payment terms? Do you even have stated payment terms?
Most businesses seem to opt for 30 days from the end of the month of invoice which means that the wait an average of 45 days to be paid.
But accounting systems are far faster now than when I joined the workplace 30 years ago so surely it’s easier to register, approve and pay invoices much faster now than all that time ago? Personally, as a small business, I find it easier to pay invoices as they arrive to minimise admin time. But not everybody is in such a strong cash position.
My standard payment terms are 7 days from invoice so an average of, well, 7 days. And most of my clients pay me by direct debit which costs a few pennies but the integration between Gocardless and Xero means that it does all the bookkeeping entries to so saving me precious time.
When speaking at conferences I’m always paid the full amount before I travel to the event as organisers like to take a few days off afterwards rather than fuss over invoices.
Is it time to review your payment terms to improve your cash position and, in turn, to pay your suppliers faster?
Cloud is now old hat. Even before the Corona Virus caused many of us to work from home most modern businesses were going paperless and using cloud based software*
So what software do we use with most of our clients?
- Receipt bank – to get your data into Xero as simply as taking a photo or forwarding an email. Optical character recognition does the rest
- Xero – to link directly to your bank statements so that your accounts are as up to date as possible for those important business decisions and loan applications
- Xavier – which helps us to check the quality of bookkeeping. We use it to check our own bookkeeping and for the few clients who insist on doing their own.
- Fluidly or Futrli – to keep track of cashflow which is so vital at the moment
- Clarity – to help you improve your business through tracing 7 key indicators.
While the software in our tech tool box does the heavy lifting we can then help you to CHANGE your numbers with our free monthly Money Matters webinars and our online Flyby review sessions. We might recommend other software depending if we think that it will make your business run more efficiently and help you to create more profit for the hours that you put into your business.
*If you’re not already using cloud based software then we can help you to migrate. If for some reason you don’t want to use the software that we like then we’ll be happy to introduce you to accountant colleagues who use other software