Ever been told cash is king? Do you know how much you have in your bank accounts this single moment? Do you know how much is owed to you? Don't get bogged down or scared of accounts receivable.
Print shops continually struggle with accounts receivable because they assume that once a job is printed, they will get paid for it. What shops overlook is the process of getting paid, and the heavy burden associated with A/R.
Remember, that money owed to you is not money you can further spend until it is in your bank account! Let's look at some best practices to create a positive cash flow in your business.
A terms sheet for your business is how you would like to get paid for the services you provide. Recognize that while you can create your own terms, some companies will have their own terms for paying you.
When you walk into a department store to buy a product, you are expected to pay for it before leaving the store. With custom goods, take a similar approach and establish a guideline that discusses the following:
Remember, you are performing a service for a person, group, organization or company. You are not expected to be a bank that gives out loans, so unless you have a very strong team that can hold customers accountable, do not give out money for free!
Train your staff to handle A/R seriously.
Have them send out bills weekly and create an A/R report weekly that outlines money that is owed to you. This should come to your desk weekly to locate any red flags that you need to address.
Make sure that invoices are marked as paid the second they come in and that checks are cashed regularly to make sure you are reporting pay-ins properly. Handle past due invoices immediately. The longer they sit, the less of a chance you have for getting paid. This bad debt is not an enjoyable number to look at when closing your year-end financials.
If you can't get an invoice out to your customer quickly, and you are not providing them with common-day ways to pay for their bills, collecting payments will be a nightmare. Printavo accepts payments using Authorize.net, Paypal, Square Reader or Stripe.
If you follow these basic best practices, you will continually have available funds to run your business. Be sure that you are using a strong piece of accounting software like QuickBooks that will take into account all your different payables and receivables you have to run a financially responsible business.
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Printavo is simple shop management software. Whether your shop works with screen printing, embroidery, signage, digital printing, or awards & engraving–we make your complex workflow simpler to manage and understand. Printavo keeps your shop organized by handling scheduling, estimates, quote approvals, workflow, payments, accounting and more. With Printavo, you’ll work smarter–not harder.Try Printavo