Running a small business from home is becoming increasingly popular. It is a viable option for most people, but it does present its challenges. Perhaps one of the biggest ones is handling the financial side of things. Most people have no formal bookkeeping or accounting training, so find setting up robust finance and accounts related processes and running them to be tricky.
An example of this is invoicing. It is a surprisingly time-consuming task, which most people do not like doing and find hard to get 100% right. Yet as you will see, setting up an efficient invoice creation and tracking process is not difficult. Once you have done that things will get much easier.
Use the right tools
The key to managing any business-related task is using the right tools. It is worth investing a little research into a good quality invoicing app, online facility, or software – for example, you can create invoices using freshbooks.com. Once you have your client’s details set up, you can easily create an invoice in about 2 minutes. Tools like this, automatically calculate the tax. They also keep track of whether the invoice has been paid and notify you when it has. This helps you to produce an accurate cash flow report and you can spot any holes in your business finances early, so you have the time to take steps to solve them.
Chase any late payers
It also makes tracking and chasing late payers far easier. A vital task. As you can see here the impact not doing this can have on the health and viability of your business is significant.
As we mentioned above, it is all too easy to let things like invoicing slide. Before you know it, you get to the end of your busy month, having not sent any out. When that happens, buying materials for the next job becomes difficult.
The best way to make sure that happens is to do your invoices as you go. So, as soon as you agree on the price, send out the deposit invoice. The moment you deliver the service or product send the balance invoice. Cloud-based invoicing services that work via your phone makes it super easy for you to pause and do that.
If you don’t want to do it that way, set aside time every day or at the very least every week and get it done. Stick rigidly to that schedule, make it a priority.
Do your best to automate your invoicing process. Use templates and if you offer a new service set up a description of it in your invoicing system. Choose an invoicing package that automatically calculates things like service fees, VAT, special discounts and adds them to the invoice. It is also important that the invoicing tool you use communicates automatically with your accounting system. That way you always have access to the latest information and will never fall behind on your VAT payments or be left panicking when it is tax return time.
Above we mentioned the need to be disciplined about managing your invoices and business finances. If you struggle with doing things in an organized way, the information in this article will help you to develop better self-discipline. Something that will benefit you in your personal as well as business life.