6 Steps to Improving Your Billing Process
For a small accounting firm, billing is the most dreaded part of the business. In addition to writing and mailing out invoices, businesses need to wait for payment on their invoices. It’s a lengthy cycle. An efficient billing system is crucial so that small firms can just focus on their services and not on their income. Here are ten easy steps to help improve your billing system right now.
1. Survey Your Clients
It’s important to know that your clients are happy with the quality of your service and products. And not just the happy ones, but the unhappy ones as well. You need to know what it is that your clients like and don’t like about your services.
Before you make any changes to how you bill, take a survey of your clients. Ask them what they like and don’t like about your billing system. You might have been doing it the same way for years and never realized it’s not the best way. The survey will help you pinpoint the flaws in your current billing system.
2. Put Together a Billing Committee
Billing is, by far, the part of the business that takes up the most of your time. An efficient billing system will save you time and energy. Let’s be honest, if you’re a small accounting firm, you’re not a salesperson. You’re the expert who’s on the other side of the table.
It’s not your job to sell your services. That’s why you need to form a billing committee to help you decide on your billing system. The committee should be made up of the senior firm partners, senior staff members, and your trusted bookkeeper. There’s a lot of experience in that room. Make sure you take them into consideration when making decisions regarding your billing system.
3. Set Up A Billing System for Each Service
It’s essential to set up a billing system for each service you offer. For example, you have a bookkeeping service and a payroll service, and an income tax service. Each service should have its own set of billing procedures.
For example, your payroll service may bill on a monthly basis. You might want to bill on a quarterly basis. That’s why it’s important to set up a billing system that works best for your service.
Another example is when the tax season comes around, most accounting firms are swamped with billings. You’ll want to set up a specific billing system to better manage the influx of invoices in the tax season.
4. Set a Time Limit For Your Invoices To Be Paid
It’s quite common for clients to owe on their invoices. Ideally, there shouldn’t be any invoices overdue, but with a busy accounting firm, it’s inevitable. In order to save time, energy, and resources, set a time limit for all invoices to be paid. For example, you want all your invoices to be paid within 30 days. That’s how long you’ll wait before sending a friendly reminder.
If the invoice has still not been paid, send a second reminder after two weeks. This is an excellent way of reminding your client that they owe on the invoice. It’s short, sweet, and to the point.
5. Develop a Late Fee Structure
It’s up to you to decide the late fee structure. It’s not uncommon for clients to pay late. Don’t be too hard on them. Most of the time, it’s either that they forgot or something came up.
Of course, if your clients are paying late more often than not, it’s time to revisit your fee structure. It could be that the company is going under, and you need to cut back on your fees. Don’t wait until it’s too late to make a change.
6. Automate Invoices Using Invoicing Software
The easiest way to automate your invoicing is to use invoicing software. Invoicing software allows you to bill your clients online and keep a record of the transactions. It’s easy to set up and easy to use. Most of these software comes with tracking, reminders, late fees, and payment processing.
An efficient billing system is the way to go if you want to grow your accounting firm. It can be tricky to come up with an efficient billing system, but that’s why you need to make sure you take the time to do a survey of your clients. They’re the ones who are paying you anyway, so you might as well make sure they’re happy.
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