MISTAKE 1: NOT LINKING YOUR BANK TO XERO
You could potentially miss when a customer pays, or worse not notice if they don’t pay, and may run into cash issues using old data, rather than real time up to date information.
What to do:
Imagine logging into an app every day which has pulled in the bank transactions from your online banking system. This means you can immediately match payments in and out of your bank to your customer invoices and any payments due to suppliers such as hosting costs, contractors etc. Xero Touch operates on IoS and Android and provides a real time hand held update on your business finances, meaning you can be anywhere in the world and never be in the dark.
MISTAKE 2: NOT BILLING YOUR CUSTOMERS ON TIME
There is nothing worse than doing the work, getting side-tracked with the next job and forgetting to bill for the first job. This can cause cash flow issues if it extends into more and more jobs, yet too often we find people are literally too busy with the work to action this.
What to do:
1) For one-off projects, when agreeing on the initial fee for the job create a quote on Xero which you can then turn into an invoice at the touch of a button when the work is done; and
2) For retainer jobs or repeat, subscription income create a repeating invoice on Xero which means the invoice gets issued each month until you tell it to stop. As an example, our invoices go out on the 1st of each month while we are sleeping!
MISTAKE 3: NOT SENDING YOUR INVOICES TO THE RIGHT PERSON
If your customers are small businesses, this won’t be a big issue as the person you agree to do the work for will likely also pay the bills. Imagine, however, that you are dealing with much larger firms, with multiple sites, multiple departments and running bureaucracy crazy processes. If you don’t get the invoice to the right person and department it simply won’t be paid when you need it to be.
What to do:
When the fee is agreed with your contact get details on how the invoice will be paid, specifically finding out if the invoice needs a reference for their system (e.g. a purchase order) and the details of who the invoice should be emailed to (never post An invoice when it can be emailed!). Then email the invoice from Xero to your contact and the payments department and attach all the backup to the invoice when sending.
MISTAKE 4: NOT MAKING IT EASY TO PAY THE INVOICE Why?
Your customers are busy people just the same as you. What would you do if you received an invoice without bank details on it? You would procrastinate unintentionally and say, “I must check up on that” while never doing so as a million other things come in.
What to do:
Xero now allows you to insert a “pay now” link on your invoice. So, when the email is received (see Mistake 3 – never issue an email other than by email), the recipient can see the backup to the invoice and an extremely handy button which allows them to literally pay within a few clicks. Imagine being paid within an hour or so of the invoice going out! We recommend you set-up a PayPal or Stripe account for credit card payments and GoCardless for bank transfers to offer as much choice as possible.
9 Instant Hacks To Stop Burning As Much Money & Boost Your Business’ Cash Flow check the full version here http://www.nuvem9.co.uk/9-cash-flow-hacks.