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4 Quick Tips to Reduce Money Waste and Increase Cash Flow in Your Business

4 Quick Tips to Reduce Money Waste and Increase Cash Flow in Your Business
"""MISTAKE 1: FAILURE TO LINK YOUR BANK TO XERO

Why?

You may miss when a customer pays, or worse, not notice if they do not pay, and you may run into cash problems if you use old data rather than real-time up-to-date information.

What you should do:

Consider logging into an app every day that has downloaded your bank transactions from your online banking system. This means you can immediately match payments in and out of your bank to customer invoices as well as any payments owed to suppliers such as hosting costs, contractors, and so on. Xero Touch runs on iOS and Android and provides a real-time hand-held update on your business finances, allowing you to be anywhere in the world and never be caught off guard.

MISTAKE 2: FAILURE TO BILL YOUR CUSTOMERS ON TIME

Why?

Nothing is worse than doing the work, getting distracted by the next job, and forgetting to bill for the first. This can lead to cash flow issues if it spreads to more and more jobs, but we often find that people are simply too busy with their jobs to take action.

What you should do:

1) For one-time projects, create a quote on Xero when you agree on the initial fee for the job, which you can then turn into an invoice at the touch of a button when the work is completed; and

2) In Xero, create a repeating invoice for retainer jobs or repeat subscription income, which means the invoice will be issued each month until you tell it to stop. For example, our invoices are sent out on the first of every month while we are sleeping!

MISTAKE 3: FAILURE TO SEND INVOICES TO THE APPROPRIATE PERSON

Why?

If your customers are small businesses, this will not be a problem because the person for whom you agree to do the work will most likely also pay the bills. Consider the following scenario: you are dealing with a much larger company with multiple locations, departments, and bureaucratic processes. If you do not send the invoice to the correct person and department, it will not be paid on time.

What you should do:

When the fee has been agreed upon with your contact, obtain information on how the invoice will be paid, specifically whether the invoice requires a reference for their system (e.g. a purchase order) and who the invoice should be emailed to (never post an invoice when it can be emailed!). Then, send an email from Xero to your contact and the payments department, attaching all backup files to the invoice.

MISTAKE 4: MAKING IT DIFFICULT TO PAY THE INVOICE WHY?

Your customers, like you, are busy people. What would you do if you received an invoice that did not include your bank information? You would unintentionally procrastinate and say, """"I should check up on that,"""" but never do so as a million other things came in.

What you should do:

You can now include a """"pay now"""" link on your invoice in Xero. So, when the email is received (see Mistake 3 - never issue an email other than by email), the recipient sees the backup to the invoice as well as an extremely useful button that allows them to pay in a matter of seconds. Imagine being paid within an hour or so of sending out an invoice! To provide as much flexibility as possible, we recommend that you set up a PayPal or Stripe account for credit card payments and a GoCardless account for bank transfers."""
 

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"4 Quick Tips to Reduce Money Waste and Increase Cash Flow in Your Business" was written by Mark under the Finance category. It has been read 123 times and generated 0 comments. The article was created on and updated on 13 January 2023.
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