Bookkeeping Services

Bookkeeping For Small Businesses: Everything You Must Know

Posted on 28/07/2021

Accurate, up-to-date bookkeeping is the cornerstone of every successful small business. Irrespective of any business sector, you must practice regular bookkeeping to run your business smoothly, efficiently, and profitably – now and in the future.

Learning the ropes of bookkeeping may sound intimidating, fret not! We are listing down everything that you must know about bookkeeping and how you can play it to your advantage for your small business.

What Is Bookkeeping?

Bookkeeping is like a financial journal. Similar to how you record your day and its series of actions and happenings in a journal, bookkeeping is similar but you will record every financial transaction that happened in a day. It is a continuous process and you must do it religiously every.single.day.

It is the process of recording and categorizing a business’s financial transactions. It is the responsibility of a bookkeeper (or an accountant sometimes!) to maintain the books.

It is the first step in discovering if the business is actually making any profits or sailing through or just experiencing losses. If the condition is latter, then with the insights of your numbers from bookkeeping, you can save the last-minute crisis.

Besides, bookkeeping also gives you insights on how you can expand your profits – specific areas where your finances are drowning and where your finances could actually do good. You could interpret your financial reports easily with regular and accurate bookkeeping.

Generally, the bookkeeper monitors and documents transactions, send invoices, makes payments, handles accounts, looks after payroll, prepares financial statements, collects bank and credit card statements, and files tax forms and returns. Bookkeeping and accounting are somewhat similar, and bookkeeping forms the foundation for a perfect accounting process.

Accounting focuses on analyzing the data – that was provided by the bookkeepers – to drive decisions for business growth.

The Importance of Bookkeeping For Small Businesses

+ Monitoring profitability

Closely following your company’s profitability allows you to track your earnings over time and plan for improvisation. Profitability measures let you quickly and easily monitor transactions and calculate how much your business makes on inventory. The profitability ratios listed below will help you assess your company’s efficiency.

  • Gross margin ratio
  • Profit margin
  • Return on assets ratio
  • Return on equity
  • Return on capital employed

+ Maintaining cash flow and improved financial management

As a small business owner, you should be vigilant of your revenue streams. Accurate bookkeeping will exactly tell you how much your business is spending and earning, and if you have enough cash to run the business. Maintaining proper financial statements will help you to analyze the financial condition of your business and determine areas of improvement.

+ Bookkeeping keeps you tax-ready

Running a start-up or a small business is both hectic and straightforward in terms of managing and handling daily operations. By recording every financial transaction on a daily basis, you will save a lot of time and be prepared for taxation at the end of the fiscal year. Besides, bookkeeping will help you determine the type of tax and amount you need to pay, in advance.

+ Straightforward reporting

As a business owner, it is your duty to record and report important financial data about your firm to prospective investors and other stakeholders. Bookkeeping programs that incorporate charts, graphs, and other visuals to make it easier to improve data precision and enhance communication when you’re pitching to the investors.

You are also responsible to keep your staff informed about the company’s financial status. It is important because they will understand if the company is making progress and their areas of improvement to contribute to the overall growth.

+ Assess performance and future planning

Detailed bookkeeping aids you track down your business’s financial records and assess its performance levels. Bookkeeping gives you a larger and clear perspective of your business’s expenditure. With those details, you can look back, understand spending patterns, and analyze details. You could re-strategize to stay on top of your business’s finances.

Moreover, as a small business owner, you must clearly define projections and determine benefits from financial improvements. That is achievable with bookkeeping.

Before we jump onto the important tips to get your bookkeeping right, here is a list of the bookkeeping terms you must know.

Important Bookkeeping Terms You Must Know

  • Accounts Payable: It is the account that holds all the details of all the money that you owe to your vendors – like suppliers, bank loans, and anyone you have borrowed money from. It is mostly on a retainer basis.
  • Accounts Receivable: Accounts Receivable is opposite of the Accounts Payable. It is the account that holds all the details of the money you need to receive from others. It could be your customers, companies, banks, or anyone that has purchased a service from your business.
  • Asset: Assets are the resources that your company owns. They are cash, buildings, hardware and software, tools, vehicles, furniture, etc., that help you to successfully run your business.
  • Accruals: Accruals are the accumulation or increase of something over time, especially revenue, payments, and benefits. It also includes the expenses and revenue that are not yet invoiced but the provision is made. The net income should be documented before the financial statements are issued.

There are three types of accrual accounts. They are accounts receivable, accrued interest, and accounts payable. Companies track accrued expenses before receiving goods and services invoices. Businesses exhibit accrued revenue for goods and services, for which they expect to receive the payment later.

  • Balance Sheet: A balance sheet is a comprehensive report that condenses the financial state of your business. In the balance sheets, you will encounter terms like assets, liabilities, and the capital of your business. The objective of a balance sheet is to show what your business owns and owes.
  • Capital: It refers to an individual’s or company’s financial assets. It includes the funds in deposit accounts or the funds from financing sources. Working capital indicates the business’s liquid capital, which caters to everyday spending.
  • Cash Flow: It is the total amount of money that your business receives and spends. It is the sum of all money a business generated from operations, investments, and financing.
  • Cost of Goods Sold: It is all the money you spend on services and products that you would sell to your customers later.
  • Credit: Credits are records that either increase an equity or liability account or decrease an expense or asset account. Credits are made on the right side of an account.
  • Debit: It is the opposite of credit. A debit is an accounting entry that is made on the left side of the account. Debits must equal credits for balanced accounts.
  • Depreciation: Depreciation is when an asset loses value over time. It can happen through wear and tear. The decreased value is measured as depreciation.
  • Equity: Equity is all the money you invest in the company as the owner plus all the accumulated profits. As a small business owner, your equity is shown in a capital account.
  • Expenses: Expenses are all the money that you spend to run your business. It is not squarely related to the sale of goods or services.
  • General Ledger: A general ledger account is an account that you use to document financial transactions and data of your company. It includes credit and debit account entries.
  • Gross Margin: It is the difference between revenue and cost of goods sold, divided by revenue. It is usually expressed in percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold, then divided by the same selling price.
  • Income Statement: It is another financial statement that summarizes your financial activity over a certain period of time. After working out the revenue earned, the costs of goods sold, and the expenses, it works out your net profit or loss.
  • Journals: Journals are where the bookkeepers store their records of daily transactions. You will use a separate journal for every active account you use, like the cash, accounts payable, and accounts receivable.
  • Liabilities: Liabilities are basically all of the debts you owe. This can range from loans you have taken to any unpaid bills you might have yet to pay.
  • Overhead: Overhead refers to ongoing costs of doing business, other than those related to directly creating goods and services. The income statement includes information about overhead expenses.
  • Payroll: Payroll is the way you pay your employees. It is a huge part of bookkeeping and involves reporting a lot of payroll aspects to the government. It covers taxes that need to be paid on behalf of employees, compensation, and more.
  • Revenue: Revenue is also known as sales. It is the gross income that the business makes through daily operations. There are a few companies that accumulate revenue in other ways, like selling assets their business doesn’t need.

Sales Revenue = Sales Price * No. of units sold

  • Trial Balance: Trial balance is ensuring your books are balanced in the credit and debit columns. It is used to ensure the mathematical accuracy of the bookkeeping entries. You will achieve this before submitting all the financial reports and closing the books for the accounting period.

The Basics Of Bookkeeping For Small Businesses

Now that you are fully cognizant of the important terms in bookkeeping, we have listed the basic tips on getting bookkeeping right for your small business.

1. Set up a new business account

Always maintain your personal and professional records separately. There is nothing worse than holding the same account to manage your personal and professional transactions. The statement will be a never-ending list, and it will consume a lot of your time in understanding every expense line.

Having a separate account for your business will help you save a lot of time, be a great resource while validating your books, accounting season, and all the other financial details that can be understood easily.

2. Allocate budget for tax purposes upfront

Always allocate some emergency funds and funds for your budget every month or upfront. Doing so will save you shocks when your accountant knocks on your door with a huge amount at the end of the fiscal year. Set aside some of your income as the funds of tax, so at that time you can save a lot of stress.

3. Always organize your records

Although it may sound simple, it is a huge deal. Keeping your records organized by maintaining different bank accounts for personal and professional usage, daily doing your books, maintaining clean records of the past will help you a lot with accurate bookkeeping.

Having your records neatly organized in a good shape will give you access to all the important information instantly and save you a lot of time. Besides, during the tax seasons, your business will run smoothly, you can pay your taxes in time by maintaining clean and organized records.

Maintaining your records should be a continual process and not a one-off.

4. Track your expenses

Monitoring your daily expenses is mandatory. Any amount that you spend on and for your business must be tracked and maintained. You can either allocate funds for daily expenses or use a business credit card. Either way, remember to track every single expense and categorize it. Another advantage of categorizing your expenses will give you an idea of how much you are spending on things and where you can avoid extra expenditure.

5. Maintain your records daily

A simple yet valuable tip is to regularly maintain your records. Maintaining records daily will give you great financial insights about your business and will be a savior if you are undergoing any financial crisis.

Put this system into practice religiously to maintain precise records. It will also eliminate any errors while calculating your taxes.

6. Leave an audit trail

If you are manually doing your books without software, then you must leave an audit trail. Your record keeping will be a lot more beneficial and productive if you can go back over your financial activities. However, using software to do your books is a good option as all this will be handled by the software effortlessly.

An audit trail means having your invoices in sequence appropriately so you can retrace your steps easily, even if there is a small error or a mismatch.

7. Keep your account receivables intact

If your account receivables are not cleared on time, you will have a negative impact on your cash flow and revenue management. Be straightforward and upfront about the amount your customers and vendors owe you. If the payments are overdue, act right away and don’t wait until your finances are sinking. Automate the process of reminding your customers in advance about the payments they owe you. As long as you keep your account receivables intact, your cash flow will be in good health.

8. Keep tax deadlines in mind

A tax deadline is stressful for most individuals and most businesses. Keep small reminders in advance so you could fill the forms and file your taxes without any errors until the eleventh hour. By maintaining accurate records, you can send taxes, file your taxes well in advance, and allow room for corrections without anyone chasing you till the deadline.

One of the most important, you will avoid penalties.

9. Switch to bookkeeping software

“Making Tax Digital” is the new way of maintaining and easing your bookkeeping efforts. Digital is the new approach to file your taxes as it avoids the need for you to pile stacks of papers, receipts, maintain fat journals, and eliminate stationary.

Unlike physical format bookkeeping, a digital app is quick and accurate. It completely washes away errors. A digital app will let you store every little detail – income, expenses, transactions – and organize your records clearly and precisely. Your financial management will be a breeze. The bookkeeping software will handle everything about the books and give you great insights anytime you want to understand your business’s present financial conditions. It makes the whole process painless and worthwhile.

So, avoid feeling overwhelmed while doing your books with bookkeeping software.

10. Outsource

As the last step, we recommend you outsource your bookkeeping and accounting processes. As a small business owner, you already have a lot of different caps to wear, and worrying about maintaining your books accurately is the last thing you would want, especially if you are not from an accounting background.

Outsourcing your bookkeeping to the experts will save you a lot of time and energy. You can concentrate on your core business and use your entrepreneurial prowess to bring in more sales and create more revenue for your small business.

Bookkeeping and accounting mistakes are costly and jeopardize success.

For example, if you were under the impression that you made a lot of money last month and when your bank statements showed the opposite, then it is a direct cue that you need bookkeeping help.

As a small-business owner, you could either

  • Hire an in-house bookkeeper or accountant
  • Invest in bookkeeping and accounting software
  • Outsource your bookkeeping to a bookkeeping expert company

In every angle, outsourcing your bookkeeping to outsourcing experts like Velan will give you access to experienced and skilled professionals, the latest software and technology, error-free books, filing error-free taxes on time, and ensuring overall revenue management.

Did we mention that our bookkeeping experts will also help you with defining your financial route towards the success of your organization?

Topics: Bookkeeping Services


BENEFITS OF OUTSOURCED BOOKKEEPING SERVICE

Posted on 12/05/2020

13 BENEFITS OF HIRING AN OUTSOURCED BOOKKEEPING SERVICE

Precise and up-to-date accounting is vital for a growing business as non-compliance takes a heavy toll on a business, hampering its development. But business owners and executives can gain more value from their time spent on business growth rather than bookkeeping. Though they could employ online accounting software like Quickbooks, they would still need an expert to feed accurate and relevant data. Thus, outsourced bookkeeping services become indispensable for any business and here are some benefits which you could derive from them.

ABUNDANT TIME

Velan’s bookkeeping services help businesses in freeing up valuable time which can be utilized for business development and betterment of the organization. Frequent distractions in the form of day-to-day accounting are eliminated, thereby improving the efficiency of the business. Customer satisfaction then gains prominence for executives, resulting in improved customer retention and referrals

RESOURCE MANAGEMENT

Resources locked in non-core Finance Accounting Statement activities can be then utilized in tasks that achieve vital business growth objectives. Executives who save money by doing their bookkeeping or doing them using non-finance employees lose out on valuable time which could be employed productively.

OUTSOURCED-BOOKKEEPING-SERVICE-NEAR-ME
OUTSOURCED-BOOKKEEPING-SERVICE-NEAR-ME

REDUCED COST

Outsourcing your bookkeeping helps you save significant money as often they could be hired at just a fraction of the cost of an in-house bookkeeper. As the service can also be customized according to your needs, you could also save up lots of idle time of an in-house bookkeeper. Velan’s bookkeeping service helps its clients save up to 40-45 % of the standard cost.

ACCESS TO EXPERIENCE AND SKILL

Hiring an outsourced bookkeeping service like Velan gives businesses access to rich experience and knowledge, without the need for hiring them full-time. Efficient and streamline accounting becomes possible as your books are handled by experts with accounting experience in a variety of industries.

LATEST TOOLS AND TECHNOLOGIES

Technology is progressing at breakneck speed and businesses have an urgent need to be in sync with them to compete in the volatile business environment. Velan’s bookkeeping experts keep up with the latest bookkeeping software and trends, thereby offering the client the best possible service.

LESS SCHEDULING

As business accounting demands consistent updates, businesses without a bookkeeping partner have to spend much of their efforts on proper scheduling and compliance. Whereas a dedicated bookkeeping partner like Velan can augment your existing infrastructure, streamlining the entire system for better efficiency without your inputs.

EXPONENTIAL GROWTH

As mentioned before, an outsourced bookkeeping partner can substantially reduce your operational costs, delivery time and personnel employed. Thus, an outsourced bookkeeping service can maintain your books and can also provide a strong base for your growth by enhancing profits and accelerating cash flow.

PRIVACY

The financial records of business require maximum confidentiality and must be handled with the utmost secrecy. Thus, trust between partners becomes vital and a certified bookkeeping partner maintains the highest level of privacy as they have to deal with multiple clients and a single blemish can become fatal.

SECURITY

Continuing from the privacy benefit, a virtual bookkeeping partner will employ highly encrypted web servers and strict security guidelines within their office premises. This your data can be more secure with a virtual bookkeeper than with a local bookkeeper who may know about your personal finance.

SCALABILITY

One major advantage of experienced bookkeeping service providers like Velan is that they have a standard process that can be scaled and customized according to the requirements of the client. This a small business can hire them at a much lesser cost and scale the service as they grow, thus making it suitable for a business of any size.

TAX AND AUDIT

When a business grows, it becomes difficult for a local bookkeeper to keep their books as different regions and countries have different tax compliance regulations. Whereas a virtual bookkeeper will have experience dealing with clients from different countries and can help you navigate the myriad tax and audit processes.

ACCURACY

Error-filled business accounts can prove to be a hindrance to business growth as they can lead to penalties and even investigations. An experienced virtual bookkeeper can maintain accuracy by using the latest and high-quality accounting tools and automating error-prone manual tasks wherever possible.

MOBILITY AND REMOTE ACCESS

Access to your accounts using a mobile device or laptops is one important benefit of hiring an outsourced bookkeeping service. Multinational organizations with offices in different locations involve a lot of travelling for their executives and they may not have the option to present in a single location all the time. This the remote access to your books is a vital factor in outsourcing your bookkeeping.

Topics: Bookkeeping Services


9 TOOLS TO IMPROVE BOOKKEEPING EFFICIENCY WHILE WORKING FROM HOME

Posted on 16/04/2020

How can you maintain your bookkeeping efficiency while telecommuting?

In light of the COVID-19 pandemic, organizations across the world are encouraging their employees to telecommute, thereby preventing the rapid spread of this virus and ensuring employee safety. However, the organizations need to maintain the productivity and efficiency of the employees as most of them have not worked from home before this pandemic. Companies that are equipped with the right hardware, proper bandwidth, sufficient VPN capabilities, and secured web servers have a smooth transition from traditional office space to a home environment.

Successful bookkeeping organizations like Velan, also have a secure and accurate infrastructure with sufficient capabilities to manage the workload of its entire workforce who are telecommuting. Tools and technology can further streamline this transition and here are some tools that could have a major impact on your bookkeeping services an efficiency while working from home

HIGH-SPEED INTERNET

Professional bookkeepers distinguish themselves from mediocre ones by employing high-speed internet with sufficient bandwidth to avoid delays and buffers in their work. As they also deal with sensitive information, the usage of a secured web server can also give an edge over their competitors. The last thing you want is a slow internet connection in the middle of a meeting with your client.

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9 TOOLS TO IMPROVE WFH

SLACK

Slack is a highly popular team management tool that helps team leaders to manage their subordinates using text, audio, and video communication. Though it is sophisticated enough to have a feature to build online communities, it also has simple features like file sharing where the users can share any type of file ranging from images to PDFs. It also eliminates the hassle of maintaining complex email chains by allowing users to leave the channel, once their work is done in the project

TRELLO

One of the best project management tools around, Trello is highly visual allowing its users to access powerful features with a simple user interface. It allows managers to handle multiple projects simultaneously using a feature called “Boards”. Each board has multiple “Lists” which are equivalent to various divisions in a project and each list can have many “Cards” which are the tasks performed. Thus, Trello offers flexibility and simplicity which could provide useful for managers to handle remote teams

ASANA

Asana is also a project management tool with comparatively more features that could prove useful for telecommuting but with a complex interface. Similar to Trello, it has the “Boards” and “Lists” features, but in addition to that, it also has “Timeline” and “Calendar” features to integrate your tasks with the calendar and assign them a priority. It is also equipped with project templates and pre-determined workflow which makes it easier for beginners as they can input their data and follow the process

GOOGLE FORMS AND SPREADSHEET

One major advantage of Google tools is their popularity which makes them compatible with various software tools and products and simple enough to be used transparently with your clients without much fuss. For example, you can easily manage your inventory using google spreadsheets by logging it if anything moves in or out while keeping your client in the loop at all times ensuring accuracy and transparency.

TODOIST

While Trello is an executive-level software giving you a bird’s eye view of the whole project, Todoist is an employee level software with minimalist features. Bookkeepers working from home can improve their efficiency by using this software as it gives them options to prioritize their tasks based upon importance, create reminders and even delegate tasks to colleagues if needed. It is more of a personal software but can also double up as a project management tool seamlessly

GRAMMARLY

Working from home involves a lot of writing and editing work as communication mostly involves texting through various tools and emails. Grammarly is an online writing assistant tool that can clear most of your grammatical errors and can further improve the tone of your writing. The ability to communicate clearly with your clients is vital and Grammarly ensures that your document is clear and easy to read. Hence Grammarly is a must for every employee whose work involves writing and editing

DROPBOX

Sharing large files over email can sometimes become difficult and hence Dropbox can be your primary content sharing platform, particularly for employees working remotely. Employees working from home can easily share work-related presentations, documents, and video files with their colleagues thereby collaborating efficiently

SKYPE

Skype is a commonly used free communication platform which supports audio, video and text communication and can be used in your computer as well as a mobile device. The major advantage is its cost efficiency and offers high-quality video and audio chats. With an array of features, Skype is a highly affordable communication tool with an easy-to-use interface

CONCLUSION

Most employees make the mistake of working from their kitchen or dining table, thereby making them susceptible to a lot of distractions. Though some manage to work efficiently like that, most people need a dedicated workspace. A proper workstation, high-speed internet, relevant tools, and good vibes can make your work highly productive and provide you with a successful telecommuting experience.

Topics: Bookkeeping Services


Top 7 Tips to Get Clients to Pay on Time & some Bonuses

Posted on 08/07/2019

You’ve delivered your services or product(s) right on time, and your client was exhilarated with it, but there’s a twist. The invoice you’ve sent are several days late, and this isn’t the first time that this has happened. Your might not have considered using Outsourced Accounting Bookkeeping Services to get your clients to pay on time.

Irrespective of the business you are in, you will experience late-paying clients. As a matter of fact, almost 80% of businesses receive their payments well past the due dates. Approximately 75% of businesses have had clients who have not paid their invoices for at least 40 days.

Looking at the circumstances, customers get the benefit of the doubt. Most clients are amicable and are looking on paying you eventually. Their late payments hurt your income and ruffle-up your budgets. That’s not good for your business’ financial health. It’s wise to nip the problem in the bud and take action to preclude new clients to become late payers.

Where should you start? To help remind your customers to pay on time, we suggest using one of the following tactics:

1. Maintain Superb Client Relationships

Your client will want to pay you on time when you make them feel special and not a revenue machine. Always maintain a friendly relationship with your customers and let them know they’re special. There are many things to make them feel they’re not only a client, but a valued member of your team. Help solve a personal problem, feature them in your blogs, or provide a one-time service bonus.

People always want to feel special, and our brains fire up when we’re mentioned by our names. Clients are more than willing to go out of their way if you do the same for them first, and you’ve just learnt the Principle of Reciprocity.

As a business, you need to always remember that the clients may have hundreds or even thousands of employees. Make a list of key contacts and send them a personalized gift or a thank you note. A simple hand-written or printed note telling them they’re important will go a long way when the time arrives for them to pay your invoices.

2. Having Precise Payment Terms

Sometimes, clients assume wrong about your payment terms. They assume you function on a “Net 21,” “Net 30,” or even on a “Net 21” basis or on specific days, like the 1st and 15th of a month. All your terms and conditions should be worded-out clearly. There should not be any gray area.

Add relevant sections in your contracts that explain the due dates, payment modes, and other required terms in detail. While working on this, check if your customers require specifically formatted invoices or how you should submit your invoices to be in compliance with their system.

Learn how having Outsourced Accounting Bookkeeping Services helps you reduce time on submitting your invoices and doing follow-up with your clients.

3. Automating Your Invoicing Process

There are times when you are busy in your project and you simply forget to send the invoices to your clients. Sending invoices through mail takes long, risks getting lost, and adds to billing expenses. Automating the process using invoicing software and accounting software gives the clients the invoice quickly. It also saves on mail expenses, paper, and keeps your invoice at the top of client’s mind.

You should schedule email reminders for payments so you are not chasing late-paying clients. Outsourced Accounting Bookkeeping Services is an invaluable option for staying on top of your Accounts Payables and Accounts Receivables. Automated solutions have payment reminders and can be linked to online payment clearance providers. It is advisable to invest in a system that automatically sends the invoices once you complete your projects.

4. Implement a Recurring Payment System

If you are working long-term with your clients, you should seriously consider a Recurring Payment System. This allows you and the client to focus more on the project and not be bothered by billing schedules and invoice due dates. It’s easy to get this up and going when you provide the same services every month.

With varying payment dues and dates, you are more likely to run into difficulties. Your client shouldn’t mind payments going out automatically for expenses without reviewing them. If they want to know, sit down and set a basic amount for all recurring invoices. If you have additional costs, show it to the clients before you bill them.

Making sure your automated invoicing solution sends invoices and receives money from clients is always a plus. You should make sure that this automated solution allows for recurring payments, allowing you and your client to focus on work. You will save time in preparing and sending invoices and your client will save time paying them.

5. Client Rewards and Recognition

How many times have you sent a “Thank You” note or a gift to your client; not to pay invoices, but to let them know that they are appreciated? A few times over the years, never? Doing this is not bribing them to pay early; you are just making them feel appreciated. Writing a handwritten “Thank You,” “Thank You for your business,” or even a “You’re a great client,” will go a long way other than clearing your pending invoices or them being paid quickly

You are giving your clients a cause to pay attention and provide a discount for prompt or early payments. This small incentive encourages your clients to clear your dues, but penalizing them for late payments is also warranted. You have to put a percentage rate for missing deadlines, but you must put the emphasis on prompt payments. You can offer a discount of 2% or even 5% for early payments.

6. Direct Invoice Payment Links

Clients might be willing to pay you immediately, but they have to open another program, log-in, and then pay you. They might be called away from their system and the session would time out before they got back. The clients don’t like repeating these steps again and again. They’ll leave it for later and eventually forget or it will be delayed.

Investing in an invoicing system supporting integrated payments like payment processor buttons reduced the time for payment processing. Your customers are a click away from paying you for your job. This reduces any distractions that might stop them from the payment task in front of them. The easier the payment process, the quicker you get paid.

In an ideal world, invoices are paid as soon as they are presented. In the real world, you need a helping hand for keeping your cash flow flowing. Using Outsourced Accounting Bookkeeping Services helps you process invoices, present it to clients, follow-up, and receive payments will reduce your financial stress.

7. Ask for An Upfront Payment and then Smaller Payments

An excellent way for lowering risk and making clients pay on time is by splitting the payments into smaller portions. You should do this will all clients. If you have clients who are already paying you, then implement this from their next project. It should be your golden standard for invoicing. You should split payments in parts like 30/30/20/20, 25/25/25/25, 20/20/30/30, 35/25/20/20 or any combination that you are comfortable with.

An agreed upon pre-payment amount before starting work on the project, the next amount after finishing the first draft. This ensures that you have received an amount before you reach feedbacks and changes to the project, or the half-way point. Now, after you have successfully implemented all the feedback, changes, critiques and the client is satisfied, ask for the pending amount.

It is better to ask for an upfront deposit when working on large projects or huge orders from the client. You should offer moderate payment options instead of one big lump sum. This ensures that you have cash flowing till the completion of the project and clients would easily be able to make those payments.

Nevertheless, when working on large projects, it is best to ask for a deposit to cover expenses.

BONUS TIPS to get paid quickly

8. Delivering Services on Time

It is not enough to look to your customer for late payments when you have not delivered your services on time. You should introspect and see if you fulfilled your customers order on time. If you’re a business and you complete the project late you can’t send then invoice. You have to account for that when you prepare your invoice.

Make sure you have enough manpower to be able to complete the project on time. Your customers will be happy and pay you quicker when you send your invoices to them for clearing. The quicker you complete your projects the quicker you get paid. There is no point in being frustrated when you deliver late on your projects, but expect the client to pay your invoices on time.

9. Quick Invoicing

Send the invoice to your customer as soon as the work has been completed. This results in the work and payment being linked together. You will find that by linking these two together, you will receive your payments quicker.

When your project work has been completed, there is no reason to delay the invoicing part. Using Outsourced Accounting Bookkeeping Services help you to reduce the delay in billing your client and providing them with invoices at the earliest.

10. Use Outsourced Accounting Bookkeeping Services

There is no denying the fact that there is always the need for outsourcing services in every field. With a dedicated Outsourced Accounting Bookkeeping Services team you can concentrate on providing your client with the best service possible. The team would be an extension of your business and would ensure prompt billing and follow-up to clear pending dues and payments.

Relying on the outsourced team also ensures that you are not wavering from your task at hand and are fully immersed in the project. All billing and invoicing-related tasks would be handled by the outsourced team and you receive payments on time. You have to update the team of the client contracts, billing schedules, reminders to be set, and follow-up criteria’s once and it would be done as a routine job.

It would be wise to invest in an outsourced team to reduce costs on mailing, printing, paper, and manpower-hours invested to bill and invoice the client. All processes relative to financial services would be handled in the backdrop without you being worried about the cash flow.

11. Ensure you have a Collection Policy

In most cases you get paid either on time or late. There are cases when you would be paid very late, but are paid nonetheless. There are situations where even after frequent late fees and reminders your clients don’t honor their invoices.

In these types of cases, you can ask your attorney to send a letter or make use of debt collections agencies. Be careful though, you are not trying to damage your relationship with the client. It may be that the client just forgot or the intern/secretary was inattentive in process your invoice.

Conclusion

For these tips to work there needs to be open communication between you and your client. While you can’t guarantee that these will work, you should prevent late payments. These tips will work with most clients and give you peace of mind.

Irrespective of how you minimize the problem, you should make sure your clients know your terms and conditions, billing and invoicing details, and other agreements. Conveying clearly with no misinterpretations gives you the advantage when you follow-up with clients for late payments and late fees.

Whatever steps you take, always have a clear-cut collections policy. This helps you to resolve unfavorable situations if they occur at all. Many customers are cooperative and pay their bills on time or late.

Never, ever undervalue the ability of preserving a harmonious and professional relation with your customers. Regardless of the frustration, always keep your cool, and be respectful when reviewing and reminding about invoices that have been pending for long.

Topics: Accounting , Bookkeeping Services


Are you having trouble pricing your bookkeeping services?

Posted on 06/03/2019

Have you ever wondered if you’re getting the most out of your bookkeeping service provider? With the hourly rates almost becoming the convention of pricing, have you ever considered that much of this would be at the mercy of the bookkeeper’s skill set and tactfulness. There’s no real pricing panacea when it comes to bookkeeping services. The hourly pricing mechanism may make sense in the case of certain larger firms with enough man power to tussle through the stages after the bookkeeper clocks out. However, if you are just starting up or own a small business, it would rather be sensible to have someone work beyond the hourly confines.

Bookkeeping services

Now that you’ve set up your business and have everything rolling except your books. It would be tempting to try saving a few dollars by swinging your axe at keeping the books relevant. As adventurous as it may sound, it requires a prescribed set of skills. Also, if things go awry, you may end up spending more than what you would have on a bookkeeper.

So how do you tailor the bookkeeping services to your requirements with optimal pricing? There are a multitude of variables that need to be accounted for before deciding upon the type of bookkeeping service you may require. Variables like company size and lifecycle, number of monthly transactions, number of employees and how payroll is processed, number of expense accounts, credit cards, invoices to send out, bills to pay, number of balances sheets to reconcile will help you understand if you require a full-time bookkeeper or if a part-time gig would suffice.

In the early stages, most small businesses are chiefly concerned with compliance – paying bills, getting paid, recording transactions, ensuring payroll accuracy and following state and federal regulations. However, over time they start putting more emphasis on the need for timely, accurate financial reports and intelligence. At this juncture the business will demand more advanced bookkeeping services as the need to make more data-driven decisions will increase.

So, the first question you need to ask yourself is whether you just need compliance – basic bookkeeping – or if you’re ready to upgrade to advanced bookkeeping that will help you drive increased profits improved cash flow and growth. Since both require very different levels of effort and skillset as you can imagine, the cost for advanced bookkeeping services is much higher.

Role of a Bookkeeper in a small Business:

The pivotal role of bookkeepers is maintaining your books closely every day. They generally do all data entry into accounting ledgers or software.

Bookkeepers focus on recording financial transactions of a business through maintaining records, tracking transactions, and creating financial reports. Also, if need be, they also take part in other activities such as

• Entering, Coding and Paying Bills
• Creating and Sending Customer Invoices
• Collecting Past Due Accounts Receivable
• Reconciling Bank and Credit Card Accounts
• Maintaining Vendors for Accounts Payable and Clients for Accounts Receivable

Primarily, there are three choices at your disposal. And knowing how they cater to the various needs of a business will help you cut your coat according to the cloth.

1. Full time bookkeeping services:

According to Glassdoor, listings in cities with high cost of living show that full time bookkeepers charge as much as $70,000, excluding the perks, health insurance, paid vacations and overhead involved. A full-time bookkeeper will handle the day to day accounting functions for your office. Although, keeping your books in order and up-to-date is the foundation of the financial strength of any business, for a small or medium business spending $70K on bookkeeping would be practically pointless.

2. Part-time bookkeeping services:

The rates of part-time bookkeeper vary widely. A rough estimate for internal part-time bookkeeper’s average at around $20/hour largely based around the job description and location. Part-time bookkeepers usually perform basic bookkeeping duties that would require supervision. If you’re one who can manage your job and do some accounting each month but need an extra hand, a part-time bookkeeper would be ideal. They can undertake tasks like inputting receipts and tracking employee time sheets, accounts receivable and accounts payable.

3. Outsourced bookkeeping services:

Outsourcing bookkeeping services is one of the most popular options for small and medium businesses these days. Just as in the case of hiring an internal bookkeeper, defining their roles and functions in a granular way will be key. You’ll have to decide upon the functions you would like to outsource and the functions you’d like to retain. The average price of outsourcing your bookkeeping vary between $500 to $2,500 a month depending on the number of transactions and complexity of services required. A key benefit of Outsourcing is it gives you the ability to customize the services you receive to your bookkeeping needs.

With the unfair degree of scepticism associated with bookkeeping, many businesses are concerned about switching over to outsourcing, not understanding how the pieces stitch together. But with today’s advancements in technology, outsourcing has never been easier and safer. Outsourcing can provide advanced and less costly bookkeeping service than a typical in-house bookkeeper.
Outsourcing comes with another added advantage. Besides effective cost cutting, it also enables freeing up resources to take care of other operational roles. Outsource and free up your good employees to help focus on growth!

Velan Bookkeeping:

We at Velan are equipped with skilled accountants possessing over a minimum of 7 years of experience in the domain of bookkeeping. Available round the clock at your disposal, we cater to services with utmost sensitivity and sensibility that the work demands. With encomiums and testimonials speaking for themselves, one needn’t think twice before calling us. Our pricings are highly competitive and guarantee international standards in terms of delivery. We cost less than an in-house accountant’s salary exclusive of his paid vacations, incentives and bonuses. Some of the services we provide are listed below:
a. Bank Reconciliation
b. Statement of Assets and Liabilities
c. Accounts Receivable and Payable
d. P & L Statements
e. Payroll Services
f. Tax Preparation

Call us today!!! And give your business the head start that it deserves!

Topics: Accounting , Bookkeeping Services