1. Reconciling bank statements.
reconciling the bank statement is one of the more important thing for a small business. Always know how much money you have. With the technology today, you can go to your bank and check the balance whenever you want. Business owners need to consider the balance shown by your bank includes only items that are gone. It does not take deposits in transit or outstanding checks. Most, if not all, accounting software is a bank settlement features. Use it, use it every month! After you balance, review outstanding issues. Margin than 10 days should be investigated because you have less money than you think you do. Excellent stop for over two months should also be investigated. Most businesses deposit checks as soon as they get them so check outstanding over a month or two might indicate a problem.
2. Connect and build relationships with the accounting department.
90% of the business is based on relationships. Usually small business owners only deal with the allocated reseller, representative, purchasing, project manager, or foreman. These are not people saving money or pay bills. It is extremely important to build a relationship with the accounting department for two main reasons; Getting set up the payment and collection of timely payments.
get set up on terms.
It is extremely important for the purpose of cash flow to be set up in terms. However, due to lack of credit history, it can be very difficult. You have to constantly make an effort to get set up on terms. Every order is place, ask. Ask about the requirements and be sure to complete the paperwork. Call and speak directly to the credit manager. If they hear your voice and know your name if you know theirs, you’re probably going to be treated a little differently. And when you get a chance, and they extend you credit terms, do whatever it takes to pay the bills on time. Loan terms are not given out easily, but they are an essential element; make them a priority for the business.
Perhaps the biggest obstacle to a new business owner faces get customers to pay on time. Because most small business owners are multi task, paperwork gets pushed to the back burner. Invoices must be sent out immediately, it is important. Also ensure that all relevant information is available on the account; payment invoice date, invoice number and make sure to get a purchase order number. I can not tell you how many times a company that I have worked with exported goods only to be told “I’m sorry I think it was not yet”. Require customers to give you the account requires a deliberate act on their part, to contact to make their decisions, ensuring that they have proper approval. I know you want to make it as easy as possible for them to buy, but if it winds up coming back, however, you are defeating the purpose. Also, already account be sure it is at a premium, especially if you are working with a new company. I can guarantee if their accounts payable gets a bill from a company they do not recognize the no PO number, it is to go straight into the trash. They just got himself 20 extra days, until you call to seek payment. Which brings up the last point of my call and follow-up, if the terms are 30 days calling 20 to be sure that it is on schedule. The Collection process is not fun, but it will bring in money faster.
Cash management is probably the number one most important area for small businesses, and it has taken time. If you can not spend the time necessary to consider hiring someone to do it. Accounting services are very cost effective, and if they can speed up the billing and collection process. That by itself was well worth it.