For an entrepreneur, money is like the air you breathe or water that rains to your bank account to feed your growth. If a customer for some reason has not paid an invoice, you need to remind the customer about it. A consistent follow up on your sales receivables helps you to manage your financial situation and will ensure that you get the money for the work you have delivered/done. Being up-to-date about the situation of your invoices is also a part of your customer relationship management
Tips for sales receivables
Mark invoices as paid as soon as you get the payment to keep track on overdue payments Always be up-to-date on the situation of your sent invoices. Which invoices are due, which are overdue and which are partly paid? Send a reminder soon after an invoice is overdue. However, it might be good to call your customer first. The customer might just have forgotten about it or the invoice has been sent to the wrong address.
What if a customer does not pay?
The first thing to do is to remind them about the invoice. A written reminder is the first notification of an unpaid invoice. If a customer, though, does not pay the invoice and you have not gotten a mutual understanding about alternative arrangements such as changing the due date, you can proceed with the help of a debt collector.
If the customer has not paid, despite the reminder, you may borrow the help of a debt collector. Though before resorting to that, you might try to arrange an alternative agreement, such as extending the due date.
When you sell to companies there is no rule defined by law as to when you can send a reminder or move the receivable to a debt collector, although it is advised to wait at least a week from the due date before sending a reminder, and another week from the reminder before moving the receivable to a debt collector.
Accounts payable and reciepts
Manage your payables
A seller’s sales receivable is a buyer’s purchase debt/ accounts payable. During the financial year the accounts receivables should be followed up at least in the accounting. However, by being as up-to-date as possible about the company’s purchases, you have better control over your accounts payables.
The process of managing your accounts payables should be organized so that it is efficient and that you minimize the risk of mistakes. It is very convenient to get a tool (a software designed for managing your accounts receivables) to help you do the work.
The most important thing is to be able to collect/ gather all the purchases and purchase invoices in one place from where you can pay them and send them further directly to your accountant.
When running a business, there are a number of other expenses that emerge in addition to the invoice purchases, such as bank and credit card payments, cash purchases and mileage allowances, that you also need documented proof of. In some cases you might also need to give additional information about the expense – for example if you buy food and drinks for a meeting, you need to give information about the meeting; when and where it took place and the names of the participants (person and company). It helps your work a lot to have this documentation in the same place as the purchase invoices, so that you are able to manage the accounts payables from one place