FINANCIAL MANAGEMENT - BILLING/INVOICING

This is the 41st of a series of newsletters published on Business Management and Management Skills. Not all topics will apply to your business, but each section will be beneficial to establish company goals and objectives. By reading and studying these newsletter articles, you’re taking the first step in achieving your goals.

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You can’t run your business without cash flow. Know where the money is coming from, and when. Cash flow results from your billings. Get your collection procedures established and working properly. Any delay in your billing results in that much delay in payment. Your billing must be accurate to eliminate delays in adjusting discrepancies. Prompt billing gets the invoice to the customer while the details of the job are fresh in their minds. The sooner the invoice is received and approved by the customer, the sooner you’re apt to receive payment. Remember, there is no embarrassment in asking for money when it is due.

Having the funds in your account (rather than your customer’s) improves your cash flow and reduces the amount of interest expense associated with borrowed money. Keep accurate records of changes and extras in your installations, and see that the proper charges are included. Be clear and avoid confusion.

Follow up delinquent accounts by phone, letter or personal calls. Issue duplicate invoices immediately when the customer claims the original was not received. Some managers require that a photocopy be made of every payment received. These duplicate records help to determine whether a payment was actually made. At some future date, you may want to have information as to this customer’s bank and its address. Retaining copies of their checks will provide a record of this information.

NOTE: For additional information, please refer to the section on Collection and Collection Procedures (#45) in this series of articles on Financial Management.

Mike Holt’s Comment: I would like to extend a special thank you to L.W. Brittian, a Mechanical & Electrical Instructor in Lott, Texas, for reviewing and editing the various articles in these newsletters. His comments and suggestions have been invaluable in the preparation of my Business Management and Management Skills’ Workbook. This newsletter article was extracted from that workbook. Watch for our next newsletter, and as always, we invite your comments and feedback. Send us your real-life experiences. We value your opinions and participation. Please respond to Barbara@MikeHolt.com. And… be sure to visit Mike Holt’s Website at http://www.mikeholt.com

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