How to Improve the Financial Cycle
In all organizations, ‘Cash is King’. I remember working at a small, young business, and there...
By: Shane Bender on Dec 21, 2020 12:46:03 PM
Back in 2005, I took a position as a Controller for a small online marketing agency. We had some large Fortune 500 clients and were doing innovative client service work.
The caliber of our employees was exceptional and entrepreneurial. I noticed quickly that even though we had good Sales and Client Service Processes, there was a basic step in business that was lacking:
There was no consistent and accurate Billing and Collection Process.
But, once a consistent and well-defined process was implemented, our agency grew quickly and was eventually sold to a large marketing holding company.
Improve your Billings and Collections Process by implementing these 3 requirements:
The Billing Process starts with a signed customer contract.
The more automation in the Billing System, the more accurate and quickly you get paid. With technology today, there really is no good excuse for even the smallest of businesses not to have an easy Billing System. Some quick ideas to consider:
As invoices become past due, you need a good process for following up and receiving payment. Sometimes, the invoice gets lost in email, so a simple follow-up reminder is all you need. As invoices become 30 days past due, you will have to call the customer to get a date for payment.
There are multiple things to consider to decrease the cost and time in collecting old invoices:
In summary, the key is to set up the contracts, processes, and develop automation so you can avoid old collection issues that keep you doing what you do best.
Billing and collections are many business owners’ and marketing agencies' least favorite tasks.
Outsourcing to a fractional CFO to handle billing and some collections will help separate the Customer Services employees from the money people. Bender CFO Services can help your business ease the burden of Billing and Collection. Contact us today to learn more.
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