In today’s business world, it is imperative that business owners have their eyes on the prize when it comes to finances.
That said you may find yourself at times scratching your head as to why your revenue stream is stuck in neutral or even going in reverse.
One of the ways to make sure your finances are not in the red on a regular basis is properly accounting for all of your expenses. In making sure customers pay their bills on time, you need to be a financial wizard.
When it comes to customers paying you in a timely manner, this typically involves two scenarios.
Many customers will pay you at the time of the business transaction, while others will be billed for your services and/or products. Either way; making sure you’re not running a deficit is crucial.
So, can you definitely take credit for properly running your business?
Avoid Piling up Various Expenses
In order to keep your business financially solvent, keep in mind the following pointers:
- Timely payments – First and foremost, make sure customers are paying you in a timely manner. While the majority of people doing business with you will be on the up-and-up, some will try and work things to their advantage. If you end up invoicing them for services or products (see more below), some may delay paying you for a variety of reasons. Some of these reasons can include that they never intended to pay you in the first place, they didn’t leave the proper forwarding address for the invoice, and they are behind on other bills and you’ve been dropped to the bottom of the priority list. No matter the reason, you’re now left without a payment, meaning you have less money coming in for your own business and personal expenses;
- Disputed payments – Another matter that oftentimes arises for many business owners is the issue of disputed payments. In such cases, the customer will dispute the charges for the products and/or services you charged them for. By doing so, they reach out to their credit card issuer and ask for a stop payment, leaving you once again in a situation where you are a put in a financial hole until the matter is ultimately decided. In order for you to go about preventing chargebacks, there are options available to you. Most notably, you can use a chargeback management program, one where your payments are in fact protected. Not only does this mean that you will get paid for the goods or services you provided, but you can oftentimes avoid costly fees, not to mention wasting your time following up on such problems. Keep in mind that a number of credit card processors will grant you a handful of chargebacks each month without a fee, though you should definitely know ahead of time which ones operate like that. At the end of the day, chargebacks can have quite the negative impact on your business, so don’t brush them off.
Are You Billing Customers on Time?
- Invoicing Payments Due – Lastly, another crucial factor to help you take credit for properly running a business is making sure you are invoicing customers who do not pay you immediately for purchases and/or services. For example, if you have a set date each month when it comes to invoicing, don’t skip it. Yes, it can be easy to miss that date when you become overwhelmed with work responsibilities, but stop for a moment and think about the negative repercussions to doing so. Your invoices get sent out late, the customer receives them later than normal, and you end up scurrying to pay business and personal bills. If you find yourself getting too busy to handle the regular invoicing needs, consider hiring a part-time assistant to oversee that need. No matter what it takes, stick with a consistent invoicing schedule. Doing so not only allows you to get paid on time, but it lessens chances customers will forget to pay and/or possibly dispute paying you in the first place.
If you can’t take credit for properly running your business at this time, then you obviously have some work ahead of you.
For your business and personal well-being, never overlook the importance of being a financial wizard.
As a current business owner, how do you go about handling financial disputes with customers?
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About the Author: Dave Thomas covers business topics on the web.