By David Kraft
One of the biggest dangers to running a small business is not often spoken about, but all-too-often encountered: the non-paying or avoidant client/customer. Yes, it is tempting to overlook the bad aspects of customers, but the simple fact remains: some people will continually avoid payment for services, especially if payment is due after receipt of the good or service.
However, businesses armed with a good accounting software package can solve this problem easily. How? By improving and automating communication with customers, reducing your need to spend time tracking down late payments.
Accounting software with a good accounts receivable module is the cure to this kind of problem that many businesses face. If you find yourself dealing with more payment issues than you'd like to, perhaps you should begin consulting accounting software reviews to help identify a better software solution.
Most accounting programs use several tools to allow open communication to customers, and they usually progress in sequential order. The better programs use these tools to automatically update accounts receivable to let the accountant know that funds are due and thus can be counted as assets.
The first, and one of the most important tools, that you need to look for in a new accounting software package is a quoting feature. This is particularly important for those in a contracting business.
Many companies run in to problems when they develop quotes by hand as they are often inaccurate, which creates problems when it comes time to bill the project to the client.
After the quote is given, the project is completed (independent of the accounting software). At this point, the user of the program sets up an invoice to send to the customer. This is the second step, and a crucial one.
Good software will automatically update the accounts receivable portion of your accounting system once an invoice is created in the software since an invoice is a reflection of money owed.
Finally, accounting software can be used to simplify the cat and mouse game of chasing down delinquent payments with settings that automatically send reminders to customers after so many days of being delinquent on a payment. Once a payment is received and accounted for, the software will automatically update the accounts receivable and revenue sections of the balance sheet to account for the cash received.
What does all this mean for the average user? Accounting software can take a lot of the day-to-day stress out of running a business. Where in the past, non-paying clients were the elephants in the room, not to be talked about but always feared, in the technological age, they can be dealt with effectively and efficiently.
Financial software will also track client payment history. This allows the business to identify clients that are regularly late or on time with their payments and can provide strategic guidance for the company as to which clients are worth doing further business with and which ones are not.
The main benefit of accounting software programs is that they automate the tasks that commonly slow down businesses and really have no return on the time spent. The time gained by automating these processes will add value to your organization in the form of more time spent on value-added tasks.
David Kraft is a freelance author with many areas of specialization. He offers advice for selecting new small business accounting software for businesses accounting software reviews site.
Source:www.isnare.com |
