Tag: Bookkeeping For Small Businesses

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


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.

Bookkeeping-efficiency-wfh
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


Building a High Performance Bookkeeping Team

Posted on 12/09/2018

What great joy it is to celebrate our own achievements! But what greater joy when share our celebration with others! While individual goals are more straightforward to articulate towards, it takes tremendous effort to mould many minds towards achieving a common goal. All team efforts require voluminous amount of discipline and self sacrificing. In a world driven by “every man for himself”, team players are highly valued for their traits and attributes

Building a team is a continuous process that does not happen overnight. The values, commitments, responsibilities and deadlines involved must be shared by all the members of a team equally. Like a car in motion wherein the wheels work in unison towards a direction, so should a team drive towards its goal. Some of the practises that can be followed are discussed below:

Building a High Performance Bookkeeping Team

1. Conduct huddles and team building exercises to ensure collective responsibility:

As a leader, it is your responsibility to be on the watch out for signs of burnout among your team, especially during peak seasons. To avoid individual exhaustion, it would be highly critical to ensure that the team performs as a cohesive unit and the roles and responsibilities are uniformly distributed. Scheduling regular face-to-face sessions with your team will also help. Taking the team out for lunch or dinner as a token of appreciation can work wonders to boost their morale, and spirits. A team huddle at the beginning of the shift can help remind o targets and goals and can also be used as a platform to share best practices.

2. Summon Periodic Review for Revision of Goals and Targets:

It’s easy to get caught up in a whirlwind of day-today activities and lose sight of bigger picture. Hence, it would be a healthy practise to break down the goal into smaller and quickly achievable targets. This would instil a sense of accomplishment that would in turn drive towards the bigger picture. A clear integration of the smaller targets to goal would be vital to provide a roadmap.

Weekly assessment of targets and recalibration accordingly would help plot one’s position on the map and help forecast the following steps accordingly. Appreciation and encouragement when small targets met will help inspire more productivity.

3. Perform Assessment, Audit and Call for Training sessions:

Periodical assessment of employees and an audit on the quality of work will help flag down gray areas, if any. Some members may require an addition training session or a refresher session to amp things up a bit. Training sessions to keep the whole team updated with technologies and practises across the world will help in staying relevant. A report of the assessment should be able to help in the direction of moving towards the goal.

4. Device Democratic Decision Making in Special cases:

Generally it’s practical for the decision making to take place up the hierarchy and trickle down the pyramid. However, when the decision taken is to impact the whole team, it would be sensible to let the team have a say in it. This would not only employ delegation but also make the employees feel important. Being made part of the decision making process promotes a sense of significance. However, this exercise can only be carried out in special case scenarios. 

5. Advocate Knowledge Transfer and Learning:

In the fast paced world we live in today driven by innovation and technology it is very important to be constantly updated. Investing in just man power would eventually render the assets obsolete.  Encouraging learning and promoting training sessions to keep abreast with trending technologies will keep the resources from losing relevance. Knowledge transfer is also critical as it delivers a certain edge to the less experienced in handling certain scenarios.

Why Velan?

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 that otherwise generally slow you down.

Call us today! And be rest assured that your business needs will be taken care of with the utmost sensitivity and sensibility the work demands.

Phone: +1-860-215-4997
E-mail: info@velaninfo.com

Topics: Accounting


Secret to Hiring the right Company for Your Bookkeeping

Posted on 25/08/2018

Small businesses sail through a sea of scathing conditions, especially during their initial stages. With limited manpower, and agendas spewing way past business hours, it almost always is a full plate. Ideally yet ironically, bookkeeping happens to be one of the most critical and least favourite activities of small business owners. Many would prefer a root canal sitting with a dentist over balancing their books. Sidelining bookkeeping can result in adverse repercussions that can even endanger the very existence of the business.

Secret to Hiring the right Company for Your Bookkeeping - Velan Bookkeeping

 

Bookkeeping as it is often misunderstood is not accounting. It, in essence is the process of preparing the information that the accountant will use to prepare financial statements and later interpret them. Two possible solutions to decipher this conundrum would either be paying expensive hourly rates to have an in-house accountant do the bookkeeping work or get one’s hands dirty oneself. Neither is advisable for small businesses. However, as every dark cloud has a silver lining, so does the onerous task of bookkeeping. The answer is plain and simple – Outsourcing!

Though there is an unfair degree of cynicism associated with outsourcing, there are instances where outsourced bookkeeping services have literally been game changers in the growth of many businesses. Balancing the books is the age-old trick to keeping a business afloat, and finding the right bookkeeper is the trick to having the books done right. Few conditions and criteria, when kept in mind can help deciding pick the right firm. Some of which include:

1. Suggestions and References:

This is pretty much straightforward. Referrals from friends, family and business associates can be a great place to start when hiring a bookkeeper. Business owners with outsourced bookkeeping services will also be able to point you in the direction. Generally, making a list of the referred resources would be the right start down this road.

2. Line of Business and Industry Relevance:

Hiring someone experienced and well versed along the lines relevant to your business is very important, especially when you work within a specific niche industry. This can save you a lot of time and resource from having to train them before actually deploying them.

3. Coherent and Compatible Technologies :

Cross compatibility is the key when it comes to transitioning. Using same software packages and allied technologies will go a long way in making things easier at both ends. Anyone you hire should be using software that is accessible to you at any time, from anywhere. Nothing they do should be a secret.

4. Consider a firm vs. an individual:

There are benefits to having a team on your side. If you think you only need an individual because you’re a small company, think again. A firm can offer you greater availability and continued oversight by more than one individual. The right firm provides greater security and fraud prevention, and a wide range of expertise and guidance when it comes to your bookkeeping and accounting needs.

5. Resource reserve and work volume:

The size of the firm and the manpower it holds is an important aspect to factor while choosing a firm to outsource your business to. Firms with sufficient headcounts will be able to provide the option of dedicated seats that would in turn help polishing the level of commitment and precision. However, to get a clearer picture, an idea of the work volume would come be necessary.

One Stop Solution: Velan Bookkeeping:

Looking to outsource your bookkeeping? Look no further!
We, at Velan bookkeeping are equipped with experienced bookkeepers at your disposal round the clock. With safety and security benchmark of international standards, we have etched a name for ourselves in the realm of outsourced bookkeeping services. Some of the services we offer include:

  • Bank Reconciliation
  • Statement of Assets and Liabilities
  • Accounts Receivable and Payable
  • P & L Statements
  • Payroll Services
  • Tax Preparation

Despite the exhaustive list of accolades and encomiums testifying the services we render, our prices are unbelievably competitive. So hang up on your fears and scepticisms and call us today to give your business the smooth sailing it deserves.

 

Phone: +1-860-215-4997
E-mail: reachus@velan-bookeeping.com

Topics: Accounting , Bookkeeping Services


Why Managing Accounts Receivables Could Save Your Business

Posted on 16/08/2018

Why Managing Accounts Receivables Could Save Your Business

For any business firm to blossom and grow, understanding customer demands and meeting their satisfaction is vital. To do this, the firm should maintain a healthy balance between the growing demands of customers and the increase in responsibilities that are bound to follow. This will strike the chords of harmony that will allow for required growth and stability of the firm. And as the customer base expands, so will expand the need for lucid financial accounting that will have to be competently dealt with. An effective system of managing accounts will strengthen the financial base that will serve as the crux of the company’s foundational advancement.

Here, understanding the ebbs and flows of receivables will help in resourcefully identifying the various sources of revenue from which they are either generated or choked. This will also help in classifying the strengths and challenges of the company, providing kaleidoscopic insights to assess and channelize the productivity variants. The need to manage accounts receivable (A/R) only validates itself with these factors. An accounts receivables report can be used as a barometer to assess the financial health of a company in conjunction with accounts payable. It is not only about maintaining a record to tally the income generation, but a system that can competently tackle dimensional issues of productivity is the key to strengthen your financial hold. Some of the perks and perquisites of timely management of accounts receivable are:

  • It can help build stronger bonds with clients and customers.
  • It will help sustain a healthy cash flow.
  • It will help avoid delay in settling suppliers’ dues.
  • It will earn interest in the respective bank account, as an added bonus.
  • It will help in better prediction of cash flows.
  • It will help ward off unforeseen expenditure without much hassle.
  • It will help plan ahead and sketch prospects for the future,

The aforementioned points make up some of the crucial cornerstones that help build and sustain successful businesses. Cash flow management is highly critical for small businesses.

According to a study cited in Entrepreneur Magazine, a bank found that as many as 82 percent of businesses fail due to cash flow management issues. As obvious as it may sound, one of the most effective ways to establish sustainable cash flow for your business would be to proactively manage your accounts receivable. Here are few tips that can help avert cash crunch and ease cash flow:

1. Assessment of Customer’s Credibility:

As much as it is important for a company to bring in new customers, it is also important for the company to study and assess the credibility of the customers.  Before extending credit, a company should have a mechanism in place that is both preventive and curative in nature and helps:

  • Assess the credibility/credit-worthiness of the customer.
  • Provide conditions that clearly define the terms for A/R.
  • Setup repayment timing and options as per remedial conditions.
  • Plan around A/R patterns, with available customer patterns.

2. Prompt and Punctual Invoices:

Prompt and punctual invoices are a pleasure to the eye. Customers dread lingering amidst the uncertainty between the payment gateway and the acknowledgment of payment for a certain service.  On a basic level, promptly sending your invoice reinforces the image of your company as professional and thorough. It also subtly notifies the seriousness you attach to payments. Customers are less likely to delay payments to a company that take accounts receivable seriously.

3. Monitoring Accounts Receivable:

Generally, upon the reception of the invoice, customers are given a certain window to settle the due. Setting up a robust calendar like mechanism that not only tracks individual deadlines but also alerts for appropriate follow-up actions will help forecast the incoming cash flow better. Follow-ups can help reveal oversights, payments lost in the mail or other issues. It can also flag a problem early in the process so that you can determine the best way to move forward with collecting payments.

4. Collections and Corrective Actions:

With a proper follow-up mechanism in place, foreseeing an account heading towards trouble becomes easy. In such a scenario, preventive or corrective measures can be initiated accordingly. There are numerous ways in which delayed payments can be handled. For example, granting a brief grace period in exchange for a minimal interest or a convenience fee. There can be a multitude of scenarios that may ensue along these lines. An early understanding of these issues will help reduce unnecessary ramifications.

Auto-Pilot: Velan Bookkeeping

Caught in a myriad of impending deadlines that has you reeling under pressure? With so many lines of records to keep track of, losing sight of the bigger picture? Sit back, hit the “Auto-Pilot” button and grab that coffee you never could make time for.

Velan bookkeeping, with highly experienced accountants at your disposal round the clock, we cater to all your accounting needs.  From notifying you at the earliest onset of any account heading south, all the way to drawing up sensitive, concurrent remedial measures, we’re in for the long haul. Breaking it down, some of the services we offer are:

  • Timely generation of invoices and effective distribution;
  • Follow-ups and Co-ordination with collections team when necessary;
  • Generation of reports, predictions, and forecasts;
  • Receiving and logging payments;
  • Maintaining efficient archives.

Call us today! And unshackle yourself from the cataclysmic commitment of chasing deadlines.

Phone: +1-860-215-4997
E-mail: info@velaninfo.com

Topics: Accounts Receivables