Invoices play a crucial part in a successful accounts receivable system. Without them, a business may experience a lag in payments due from debtors, which could have ripple effects on the cash flow of your business.
An adequate accounts receivable system is arguably the backbone of the financial success of a business. Next to securing a constant influx of work for a company, is the ability to get paid for work rendered. Having a strong invoicing system is the heartbeat of ensuring the latter, but adequately managing this process, can be a full-time job. Oftentimes business owners try to juggle the operational side of their business while trying to ensure that invoices go out on time, but mismanaging this can be detrimental to a business, as not getting paid does not only limit business cashflow, it skews the financial view of a business, encourages bad debts and limits a business from meeting its financial obligations.
You may think that invoicing is as simple as sending a statement of what your debtors owe you, but tracking, managing, and updating the payment profile of clients are integral to the success of this. Using invoicing software can help manage invoicing woes, but it is important to have it set up correctly with all integrations reflecting on the recon and financial statements of your business.
How Xero accounting software ensures adequate invoicing
Xero accounting software partners with Stripe, an online payment processing, and commerce solution, to generate invoices and help businesses get paid faster.
An adequate invoicing system should manage payment due dates, generate invoices, and recognize payments received. Here we look at three ways in which your business can nurture this process to ensure faster payment with Xero.
1. Provide custom online invoices
When it comes to sending invoices, accuracy, and correctness are only part of it, it is also important that invoices allow for immediate action to be taken. Manual invoices can easily go missing or be forgotten about under a pile of paperwork. Online invoicing provided by accounting software like Xero, not only prompts clients to pay securely and immediately but also automatically offers regular reminders for invoices not paid. This has the built-in safeguard of being present in your client’s inbox and promotes faster payment.
2. Allow for various digital payment methods
When an invoice is presented to a client digitally, it should equally offer a variety of digital payment methods. Offering your client a secure means of paying online is dead in the water if the client’s preferred payment method is not integrated with your invoicing payment methods. Xero allows for common payment methods such as Google Pay and Apple Pay. This is another safeguard when it comes to securing swift payment.
3. Ensure adequate update system
There’s nothing worse than being told you owe someone money when you don’t. It is crucial for your invoicing system to have integrated updates. When a client makes a payment, your invoicing software must register that a payment has been made and either stop sending invoices or only send invoices for the new amount due, if the account was not settled in full. This integration is imperative to maintaining credibility and good client relationships.
With Xero accounting software you should be able to automate invoicing. It is important to consider the basket of software services when choosing one that deals with invoicing, Automation and integration with bookkeeping records are of utmost benefit. Our team of expert outsourced controllers can help you set up your accounting software to meet a blanket of accounting needs. Partner with Fusion CPA to help your business to manage invoicing and accounts receivable to ensure it remains an asset to your company.
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This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.
