Wednesday, October 21, 2020

4 Ways to Get Paid Faster Using QuickBooks

 It’s probably one of your toughest challenges. How do you encourage customers to make payments faster?


Cash flow is a problem for so many businesses right now. Unless you sell products or services that are in high demand during the COVID-19 pandemic, you’re probably struggling to get payments from customers who are also cash-strapped. Adding a line to your invoices that says something like, “We appreciate your prompt payment” isn’t making a difference.


QuickBooks provides numerous ways for you to nudge customers who have let payments slide beyond their due dates. You don’t have to be heavy-handed about it (though you may have to be eventually on seriously delinquent accounts). Here are four ways you can speed up your receivables.


Assess finance charges on late payments.


You don’t want to make customers unhappy, but consumers and businesses are accustomed to having interest assessed on late or partial payments. QuickBooks can help you set up finance charges. Once you’re logged in as the Admin, open the Edit menu and select Preferences | Finance Charge | Company Preferences. You’ll see a window like this:



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Setting up and assessing finance charges can be complicated. We suggest you consult with us if you want to take this route.


You might consider what you pay some of your other vendors when you’re deciding on variables like Annual Interest Rate (%) and Grace Period (Days). Keep in mind that in some jurisdictions, you can’t charge finance charges on existing finance charges, so you’ll need to know your local laws if you want to check that box. Then, tell QuickBooks how you want it to calculate the charges. 


To see who owes finance charges and have them applied, click Customers | Assess Finance Charges. Select the Assessment Date and the customers who should be charged. If you click the box in front of Mark invoices: “To be printed,” QuickBooks will print a separate finance charge invoice in addition to the main invoice for each customer. Otherwise, the charges will just be included on their next statement.

Warning: Please let us work with you if you decide to add finance charges. We can help prevent mistakes that will most likely make your customers very unhappy.


Allow your customers to pay online.


This is actually our number one suggestion. You’re not penalizing your customers in any way. You’re simply providing them with an easier way for them to settle up their debts. It’s a courtesy to them, actually. They don’t have to dig for their checkbooks and stamps, address an envelope, and get their payment to the post office. QuickBooks adds information to your invoices telling customers exactly how to proceed.


The benefits to you are obvious: You’re more likely to get paid quicker, and you won’t have to deal with cashing checks and chasing down deposits. You’ll have to first sign up for QuickBooks Payments, which will allow you to accept credit card, debit card, and ACH bank transfer payments electronically. There are no monthly or setup fees, but you’ll of course pay transaction fees. The money should be in your bank account by the next business day, and QuickBooks takes care of all the background work, matching payments with invoices. We can help you get set up here.


Send statements.


You can always run an A/R Aging report to see who’s past due. But you’ll also learn which customers are in arrears if you create and send statements. Click Customers | Create Statements to produce comprehensive lists of your customers’ invoices and payments. You can define a date range and send statements to everyone (or a hand-selected group). You’d be more likely to send statements to everyone who is a specified number of days past due, as pictured below.



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You can tell QuickBooks which customers should receive statements by completing the fields in this window.


Polish up your invoices and send them promptly.


You have more control over your sales forms’ content and layout than you might realize. Open the Lists menu and select Templates. Double-click on the invoice form you use the most, then click Manage Templates. Highlight the desired form and click Copy (it’s best not to alter your existing templates until you’ve practiced a bit). Give it a new Template Name if you want, then click OK. You can change colors and fonts in the window that opens. Click Additional Customization at the bottom of the window, and you’ll be able to add, edit, and delete fields and columns in your forms.


Send your invoices as soon as possible after you’ve completed the sale. You want customers to remember shortly after the fact that they need to pay you.


Poor cash flow is a perpetual problem for a lot of small businesses – and not just during a pandemic. If we can help you use QuickBooks’ tools to evaluate your current cash flow and forecast into the future, or if you need further explanations of anything we discussed here, please don’t hesitate to contact us.


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Poor cash flow? QuickBooks has tools that can help you get paid faster. Call or email us to set up a consultation.


Customers not paying you on time? Consider adding finance charges using QuickBooks. We can walk you through how to do this.


If your customers are slow to pay, maybe they need a faster, easier way. QuickBooks Payments allows you to accept bank cards and transfers. We can walk you through how to set this up.


Are you using QuickBooks’ Statements? They can nudge customers into settling outstanding debts to you. Ask us about this.


Wednesday, October 7, 2020

10 Tips for Better Budgeting…

 …and how QuickBooks Online can help you with the mechanics.


If you already have a budget, it’s probably been difficult for you to stick with it for the last several months. Unless you provide products and/or services that have been in great demand since the  COVID-19 pandemic took hold, you’ve had to adjust your budget significantly.


Better days are ahead, though, and now is a good time to start doing some planning for 2021. While there are still likely to be uncertainties next year, creating a budget will give you a starting point. A budget increases your awareness of all of your projected income and expenses, which may make it less likely that you’ll find yourself constantly running short on funds.


Here are some ways you can make your budgeting process more effective and realistic.


Use what you already know. Unless you’re starting a brand-new business, you already have the best resource possible: a record of your past income and expenses. Use this as the basis for your projections.


Be aware of your sales cycle. Even if you’re not a seasonal business, you’ve probably learned that some months or quarters are better than others. Budget conservatively for the slower months.


Distinguish between essential and non-essential expenses. Enter your budget items for the bills and other expenses that must be covered before you add optional categories. 



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You can use data from a previous year to create a new budget in QuickBooks Online.


Keep it simple. Don’t budget down to the last paper clip. You risk budget burnout, and your reports will be unwieldy. 


Build in some backup funding. Just as you’re supposed to have an emergency fund in your personal life, try to create one for your business.


Make your employees part of the process. You shouldn’t be secretive about the expense element of your budget. Try to get input from staff in areas where they have knowledge.


Overestimate your expenses, a little. This can help prevent “borrowing” from one budget category to make up for a shortfall in another.


Consider using excess funds to pay down debt. Debt costs you money. The sooner you pay it off, the sooner you can use those payments for some non-essential items.


Look for areas where you can change vendors.  As you’re creating your budget think carefully about each supplier of products and services. Can you find less costly alternatives?


Revisit your budget frequently. You should evaluate your progress at least once a month. In fact, you could even start by budgeting for only a couple of months at a time. You’ll learn a lot about your spending and sales patterns that you can use for future periods.


How QuickBooks Online Can Help


QuickBooks Online offers built-in tools to help you create a budget. Click the gear icon in the upper right corner and select Budgeting under Tools. Click Add budget. At the top of the screen, give your budget a Name and select the Fiscal Year it should cover from the drop-down list by that field. Choose an Interval (monthly, quarterly, or yearly) and indicate whether you want to Pre-fill data from an existing year. 



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QuickBooks Online supplies a budget template that already contains commonly used small business items.


The final field is labeled Subdivide by, which is optional. You can set up budgets that only include selected Customers or Classes, for example. Select the desired divider in that field, then choose who or what you want included in the next. Click Next or Create Budget in the lower right corner (depending on whether you used pre-filled data) to open your budget template. If you subdivided the budget, you’ll see a field marked View budget for. Click the down arrow and select from the options listed there.


To create your budget, you simply enter numbers in the small boxes supplied. Columns are divided by months or quarters, depending on what you specified, and rows are labeled with budget items (Advertising, Gross Receipts, Legal & Professional Fees, etc.). You simply enter numbers in the boxes that apply. When you click in a box, a small arrow appears pointing right. Click on this, and your number will automatically appear in the rest of that row’s boxes. When you’re done, click Save in the lower right. You can edit your budget at any time.


QuickBooks Online provides two related reports. Budget Overview displays all of the data in your budget(s). Budget vs. Actuals shows you how you’re adhering to your budget. 


We know creating a budget can be challenging, but it’s so important – especially right now.  We’d be happy to look at your company’s financial situation and see how QuickBooks’ budgeting tools—and its other accounting features—can help you get a better understanding of your finances.

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Don’t have a budget set for your business? QuickBooks Online has tools that can simplify the process of creating one.


When you’re creating a budget, it’s helpful to distinguish between essential and non-essential expenses. QuickBooks Online has tools that can help you, including budgeting for necessities first. 


When was the last time you shopped for new suppliers? Now is a good time to see if you could save some money and help with your budget. QuickBooks Online has many tools that can help both you and your business budget.


Did you know QuickBooks Online allows you to use existing income and expense data to create a budget? Here is how this is done.