Small business owners often wear many hats, and the unfortunate result of this is that things sometimes fall through the cracks. When it comes to making payments for goods and services, you don’t want to make mistakes. These tips will improve your efficiency, giving you more time to focus on the real nuts and bolts of your business.
Design a System
You need a system to manage your bills and pay them on time. If you’re old fashioned, you might print everything out and put it in a “to be paid” file. Most people these days would start with an Xcel file that tracks company names, amounts owed, and dates due, along with brief descriptions of the invoices. You could also use any number of software programs to handle this accounting. It doesn’t matter what you use, as long as it works for you.
Manage Your Cash Flow
You can’t pay invoices if you don’t have money in the bank. Work hard to maintain a constant positive balance in your bank account so that you are always ready to pay other invoices on time. Your payments might be coming from a small business loan if you’re just getting started, or you can look into invoice financing if you’re waiting on payments yourself. Either method can improve your cash flow.
Designate Time for Payments
Rather than haphazardly paying invoices as they come in or as you remember them, it’s smart to block off time in your schedule to handle payments. Going through your bills once a week is highly recommended. This gives you time to focus only on payments and ensures that absolutely everything gets done.
Skip Paper Cheques
It’s cumbersome to write physical cheques, especially when you don’t have to. Look into the various options you have for sending payments online. You could pay with a wire transfer or use other payment systems that instantly send money to your vendors instantaneously.
Sometimes, you want to get the work of making payments out of the way, but you don’t have the money in the bank. Even if you aren’t struggling with a cash flow problem, you might prefer to have all payments made on a single day. To get around this, you can schedule the payments for a date in the future by utilising the features of your payment system.
Upgrade to an Automated System
As your business grows, you’ll find that a basic spreadsheet no longer serves your needs. It’s time to switch to a faster payments system that allows you to make urgent electronic payments instantly. These systems are incredibly secure and can be greatly utilised for payroll processing and employee expenses, as well as for those last-minute bills.
Double Check Your Records
When you have a system in place, it’s easy to assume that everything is going smoothly. Unfortunately, mistakes happen. You might not realise you forgot to hit the “send” button. You might have mistyped the payment amount. When vendors contact you with these problems, it interrupts your day and you have to spend time researching the issue. Instead, take some time to review your actions to ensure that everything is in order. Ten minutes of review could save you 30 minutes of headaches later.
Hire an Accountant
If you’re looking for true efficiency, it doesn’t get any easier than hiring a professional. A professional accountant is a great solution when your business is starting to grow so much that you find yourself spending too much time balancing the books. This person doesn’t have to be a full-time member of your staff, and a part-time accountant can be more affordable than you think.
Naturally, you want to stay focused on your true business, not the finances. By streamlining your payment processes, you’ll have more time to do what you love and you can focus on growth and expansion.