Not enough cash is the number one killer of small businesses, no matter what the industry. You can’t grow if you don’t have enough money to pay for supplies, marketing, and payroll. It’s worse with the trades industry. A lot of times clients are slow to pay or aren’t charged until the end of a project. This can back you up, or worse, not let you get the job done on time. What can you do to avoid this?
You can start off by invoicing right away. As soon as your client has agreed to the estimate, open up your Quickbooks Online app. Press the invoice button. Fill out the info, including your client’s email address, hit send, and that’s it! This way it’s less likely that you will forget to send the invoice, or that the information is put in wrong. For the client, it can be easier to pay using a digital invoice.
It might be a good idea to start only accepting digital forms of payment, like echecks and credit cards. Although there are fees with these types of payments, being paid right away makes this worth it. Remember how long it takes to get paid via check? Well, this can be no more with digital payments. For the most part, funds are in your bank two to three days after the payment is made (depending on the bank). In some cases, you can even pay a little extra to have the money deposited the next day. Positive cash flow is always a good thing!
We’re all human which means that we forget things (a lot). So my final tip to you is to set up reminders for your clients on your digital invoices. These can be set up to go out automatically on a schedule you choose. The benefit of this is that if your first invoice got buried in a sea of emails, this new email will bump it back to the top.
Invoicing is a mess. It is always the number one reason businesses fail, especially trades businesses. Don’t let your business be a part of that percentage. Take care of your cash flow by implementing these tips. Here are some more ways to maintain your cash flow . If you’re feeling overwhelmed maintaining it all (the invoicing, bookkeeping and everything else), reach out to Aladdin Bookkeeping: Bookkeeping for Contractors for help. We will get your systems set up and maintained so you can get back to doing what you love. Let me know in the comments how you protect your cash!
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