As a small business owner, you may generate a list of receivables each month from people who don’t pay in full prior to receiving your goods or services. This might work as a business model for you but there is a frustration you may face at the end of the month when it comes time to collect.
For some of your invoices, collecting quickly isn’t a problem. You invoice, they pay, and their presence on your receivables list is just because the check didn’t get to you before you printed out your receivables list.
But there will be some on your list who don’t pay. (Because they can’t or they won’t; it doesn’t matter why).
When your receivables list prints out for the previous month at the beginning of the month, what should you do?
The Small Business Info Canada site at About.com has great advice: “Be impatient”. (You can read the full article here, and there are additional links you might find interesting).
This is great advice. Of course you don’t have to be rude or unprofessional, but you should get on them right away. Follow up with an email. Follow up again the next week with another email. Keep it short and professional with something like: “I’m checking in on the status of my outstanding invoice.”
If you do this right away, you’ll collect more, more often, and you’ll have a really short receivables list.
The problem is that people are too nice. “Oh, I won’t bother them. I know they’re busy,” or “I want to be a low maintenance vendor”… and so on. When this happens you devalue your own work, you risk the longevity of your business, you may even create cash flow problems for yourself, and you let clients slip through the cracks… some might not pay simply because they forgot and then, by the time you get around to asking, they’re on to something else.
My friends: You have a right to be paid for work you delivered! There is nothing wrong with following up on money owed! Don’t think that calling up the people on your accounts receivables list is being the “bad cop”. Accounts receivables and collections is a spectrum… on the one side you’ve got the nice and professional person you normally are following up on outstanding invoices. No big deal. Slowly, as payment becomes more and more delinquent, you can move them along the spectrum, raising the heat, increasing the pressure, and (someday) sending them to a collections agency. But it rarely has to go that far!
Jessica Routier, IAC-EZ
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T Pay Posted in: Just Blogging
Now that tax season is over, it can be tempting to file away the thought of taxes until next year when you need to do them again. Instead, we recommend making a few small changes right now while your thoughts of taxes are still fresh on your mind. Yes, it’s slightly annoying to extend out all that thinking-about-taxes for another day or two but it can save you time and money through the year and it can save you plenty of hassle and frustration when you do your taxes next year.
Here’s what we recommend:
Change how you file through the year. Think about the sorting, filing, and digging through a mountain of paper that you did this year. How can you change that next year? I’ve seen other people who have a filing system that they stick to diligently and think they’re being really disciplined when in reality, the filing system isn’t “attuned” to the information they need on their taxes so they still have to do the sorting and filing in a year’s time. Avoid that hassle by thinking about the information you need at your finger tips and how it’s sorted in your taxes and create files to that effect.
Schedule earlier. If you do your taxes yourself but tend to procrastinate, why not schedule some tax prep into next year’s schedule right now. Yes, right now! But break it up over a few weeks so you only have to do a few minutes a day. Schedule a reward at the end.
Find a tax preparer. Is the pain of taxes really worth it? If not, find a tax preparer. Here are some tips I found to help from the Herald-Dispatch.
Read this stuff: I’ve mined the web looking for some great ideas to help people prepare for taxes. Some of it will mention this year’s tax season but most of the information is relevant for any tax year. This isn’t necessarily “tax season” information. It’s mostly good ideas to implement into your life and business throughout the year so that tax season is way less painful:
Yes, the last thing you WANT to be doing right now is thinking about taxes. But a few minutes now, while it’s still on your mind, will make a world of difference throughout the year and during next tax time.
Jessica Routier, IAC-EZ
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Train Wreck Posted in: Just Blogging
