In this edition of Operation Resilience, we analyse automated invoicing. The administrative effort tied up in accounts payable is a big burden for many business owners. If rushed or not given the attention it deserves, mistakes can occur which can be costly. Modern-day accounting systems like Xero, MYOB, Sage, etc have native features that allow businesses to create repeat, recurring invoices. It’s surprising how many businesses don’t use these features instead, running billing manually each month. This is prone to error or can lead to invoicing being delayed due to operational issues or staff absence.
Automated invoicing can be used for “Contracted” or “Subscription” based services. That is services such as Permanent Office rental, Hot-desk subscription, or Monthly Virtual Office fees. It’s ideal for services that are billed in advance where the fixed monthly amount is consistent each month. This allows businesses to stagger month-end processes. Invoices can be set up to go out on your preferred date of the month at the individual client level. Staggering your month-end process will help to smooth out of the peaks and troughs in your cash flow.
Account systems like Xero allow you to include dynamic content so that each time an invoice goes out the door it automatically inserts the <month> and <year> tags. Automating your invoicing process reduces the potential for error, streamlines invoice approval, and provides greater visibility of your cash flow.
Automated Invoice Reminders
Invoice reminders are another automated feature that most modern accounting packages include and we recommend adopting. The feature is usually configured at the client level and can be configured based on your commercial terms e.g. 30,60 or 90 days. Reminders can include varying email messages based on their overdue status. An automated gentle reminder can help to bring in payments more efficiently. Most of your customers will be good payers, often it’s simply an administrative oversight.
It’s worth putting in the time and effort to get the most out of your finance solution. This will be rewarded with greater visibility to run your business efficiently, improve cash flow and reduce the administrative burden on your team.
Further automation can be achieved by utilising autopay via credit card. For more information on credit card payments refer to our article on Cashflow Best Practice.
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