Monthly Archives: August 2014

Looking for more profit? Be more effective with customer billing.

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A significant driver of business profitability is the successful management of cash flow.  An integral part of cash flow is a functional Invoicing and Accounts Receivable structure.  Without an efficient and effective way to invoice clients and receive payments from them, a businesses’ cash flow system can fall by the wayside.


Not surprisingly, one of the biggest complaints I hear when analyzing workflow and efficiencies is that businesses find it difficult collect from their customers.  Certainly, there are some customers that (through no fault of our own) make it really, really hard to collect for services or products we’ve provided.  However, what I’ve found is that, more times than not, there are some minor changes that we can  put in place that will help us be more successful at managing that critical Accounts Receivable function.

Based on multiple client experiences, here are some things you may want to check within your business workflow that will make collecting revenue more efficient and effective:

1.  When you receive a request for a product or service, are you collecting all necessary information you need to invoice that client effectively?  For example, I had a client in the building industry that struggled with collecting from their clients.  What we found was a disconnect in their customer intake form.  When they took a call for services, they collected the work site information, but didn’t collect the “bill to” information.  Consequently, when they sent invoices to the only address they had on file (the work site address), the mail came back as undeliverable.  This same situation comes up with “bill to” and “ship to” address disconnects.

2.  Do you have a regular cycle for creating invoices?  Whether it’s once a week, once a month, or whenever a project is completed, it’s important to have an invoicing schedule and stick to it.  The last thing most of my clients want to do is sit at a computer and create invoices, but it is a necessary and critical part of our business.   Creating invoices “when I get around to it,” “when I’m not so busy,” or “when I need money” does not provide consistent cash flow.

3.  Do you have a process for creating and sending invoices?  Whether you use hand-written invoices or a Quickbooks-type program, make sure you have a form or process that captures all the information you need to create the invoice so when you do sit down, you will have everything you need to get the job done.  Some items to include on an invoicing form may be: date ordered, date delivered, quantity, stock number, description, cost, discounts, etc.

4.  Are your invoices clear and concise?  There is a vendor that I pay once a month and nearly every month I have to call about my invoice because something doesn’t look right.  It’s generally little things like the date they say I received the service was a date I was out of town; the description of the product is vague and/or inaccurate; they charged a different account within our family plan than they should have; etc.  As a general rule I have received the goods or services they charged for, they just did it inaccurately.  After a week of unraveling the errors and receiving a new bill, not only am I frustrated, I’m a bit distrustful.  Make sure when you are creating invoices, they are accurate.  This will save you and your customers a ton of time.

5.  Have you clearly communicated a reasonable “Due By” date?  No matter what your terms are, spell them out clearly and be fair.  Do not have “Net 7 Days From Invoice” on an invoice you put in the mail.  There’s no way a customer can pay within that timeframe.  If your terms are “Net 30,” clearly show that.  If they are “Due Upon Receipt,” that’s fair too, just make sure you give sufficient time for the customer to receive the invoice and get a check in the mail before harassing  them for payment.  Whatever you do, don’t leave the “Due By” date blank.  This automatically creates a disconnect on payment expectations.

6.  Have you given the customer appropriate “how to pay” information?  For example, have you clearly highlighted your mailing address for them to send a check to?  I’ll share a  personal experience.  When I first started using Quickbooks, my new invoice form didn’t have my zip code.  Imagine my embarrassment when a client had to call me for that information so they could mail payment.  We shouldn’t make it hard for our customers to pay us.

7.  Do you accept electronic payments?  Sometimes you can set  links within your electronic invoices that will allow customers to deposit funds directly into your bank account.  Some clients use a PayPal account for similar purposes.  Square is a great option for collecting payment on-site when work has been completed.  If receiving electronic payments is an opportunity for you, do research the various options, including processing fees, etc.

8.  Do you have a manageable and accurate Accounts Receivable aging report that quickly tells you which clients are current or overdue by 30-60-90 days?  Even though we expect our customers to pay their bills on time, situations arise when they don’t. There could be any number of reasons:  they didn’t receive the first invoice, they thought the price was unfair and have been meaning to call, they have fallen on unexpected hard times, etc.  Whatever the reason, the earlier you determine what the situation is and take the necessary steps to resolve the issue, the better the relationship will be between you and your clients.

According to Sutherland Global, as of May 2013 the average past due rate in the United States was 18.29%.

And even worse:

  • 26% of invoices 3 months old are uncollectable
  • 70% of invoices 6 months old are uncollectable
  • 90% of invoices 12 months old are uncollectable

Finally, remember that you are a goods and service provider, not a lender.  Keeping track of your Accounts Receivable will provide better cash flow and contribute to your overall business success.


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What’s the best filing system for you?

Filing System

What’s the best filing system?  Short answer . . . “it depends.”

A filing system is just a way to control how paper, or information, is stored so that when you need the document or data, it can easily be retrieved.  That sounds pretty simple, doesn’t it?  Easier said than done in most circumstances.  If you are looking for the perfect filing system, you need to ask yourself some very important questions:

  1. Who will be using the system?  Will is just be you or will others need access and understanding of the system?
  2. Will documents be in paper or electronic format?
  3. How much space will you need for your filing system?
  4. Where will the files be kept?
  5. How do you want to designate personal vs. business files?

1.  If you are the only one that will use the filing system, you can do pretty much whatever makes sense to you.  If you want to file by color, then file by color.  If you want to file by date, then file by date.  If you want to “file” in plastic totes, go for it. However, if the filing system will be shared with other people, it’s important to ensure all the stakeholders have input into the system.  Taking stakeholder input into the design of the system will ensure understanding and buy-in with all parties.

2.  If the documents are going to be stored in paper format, make sure only relevant paper is retained.  Much of the time when paper documents (bills, insurance renewals, etc.) are received in the mail, there are inconsequential documents that come along with them.  Be sure to discard any non-essential paperwork and don’t jamb up the filing system with things that are not needed to support your home or business.

If you are filing electronically, make sure there is a universally understood naming convention that everyone adheres to.  For example, your September Comcast bill may be named “2014.09 Comcast” vs “September Comcast bill.”  Using a naming convention that includes the year and month will make document searches much easier.

No matter what format the records are retained in, it’s important that appropriate record retention and purging guidelines be adhered to.  It’s best to check with your accountant to ensure understanding of record retention guidelines to support your personal or business tax situation.

3.  Make sure you have enough space for your filing system so drawers do not become so packed that they can not be used effectively.  Filing drawers should only be 70% – 80% full,  allowing for ease of movement within the drawers.  Using hanging folders will also make a filing system much easier to use.

4.  Ensure that your filing system is located where all stakeholders can easily access it.  If it’s too far away from the frequent users, information will not get filed in a timely basis, resulting in lost productivity.

5.  If you manage files for both a home and business, make sure the files are not mixed together.  For example, even though it may make sense to keep a tax receipts together, when it comes time to do your taxes, you will be glad you didn’t.  That holds true for utility bills, car expenses, real estate documents, etc.  Your accountant will thank you for keeping your home and business records separate.

I could go on-and-on about filing.  What’s the best way?  When should it be done? Should files or binders be used?  If folders are used, should they be color-coded or plain?  Should the tabs be straight-line or staggered?  There are lots and lots of ways to file correctly.   What it basically boils down to is . . .  do what works for you and your team.

Cindy Jobs

Member:  National Association of Professional Organizers (NAPO), Seattle Area Chapter President

Certified Premium Member:  Institute for Challenging Disorganization (ICD)

Do you send bad e-mails?



Did you ever send off what you believed to be the most fabulous, informative, and engaging e-mail, yet no one responded to it? Here’s a thought:

Maybe the e-mail wasn’t as effective as you thought it was.

Here are some tips to make e-mails more engaging:

Do you need to send it? This is the biggest decision you will make about an e-mail. Do you really need to send it or would a quick phone call or text suffice? If you need to provide or receive the information for documentation purposes, or it it’s too long or complex for other communication devices, send the e-mail. If you are trying to schedule lunch with a friend, don’t bog down their e-mail, pick up the phone.

Subject Line: The e-mail intent should be very clear in the subject line. Which subject line do you think will elicit a more timely response?

1. Subject: Agenda
2. Subject: Respond by 07/02: July Board Agenda Items

Hopefully you selected the second one which provides adequate information, without even opening the e-mail, to determine what needs to be done and in what time frame.

Conversely, if the e-mail is only intended to be informational, say so. Something like “Info Only,” “Joke,” or “Family Photo” in the subject line will let the receiver know it is something they can look at when they have some down time.

Keep it short and simple: The e-mail should only contain whatever necessary to assist the recipient in processing the information. As much as you may want to set the tone with pleasantries, don’t succumb to the “Hey there! Hope all is well with you. How was your weekend?“ verbiage unless the e-mail is truly intended to be conversational in tone and you actually want to engage in personal banter.

Do, however, provide sufficient background within the e-mail to assist the recipient in processing it effectively. If would like them to review a product or website, provide a hyperlink. If would like them to review a document, make certain you’ve attached it. Providing whatever information necessary to assist in the process will ensure a more timely response.

Make your close mean something: This is a good time to succinctly reiterate the intent of the e-mail and proactively thank the recipient for their anticipated action. “Thank you for submitting your agenda items by Wednesday, July 2nd, at 5:00 PM.”

Review before sending: Always, always review an e-mail before sending it. You can’t take back typos and bad grammar. Check the tone of the e-mail (did you come off as too demanding?). Ensure you provided everything the recipient needs to process the e-mail effectively.

We are continually bombarded with electronic messaging through our e-mail in-box. Make certain your e-mails stand out from the others by being relevant, succinct, and polite. Your recipients will thank you for it.

Cindy Jobs

NAPO (National Association of Professional Organizers) Seattle Area Chapter President

Premium Subscriber, ICD (Institute for the Challenging Disorganization)