Accounts Payable Tips Every Owner Needs to Know

Accounts Payable Tips Every Owner Needs to Know
Have you ever lost or forgotten to pay a bill? When it happened, how did you feel going on a frantic search for the bill/e-bill wasting time and energy finally realizing you must have deleted it? Anxious? Then giving up and contacting the payee and requesting another bill feeling ashamed that you lost it in the first place. You are not alone. We all have that stressed anxiety when forgetting a task that needs to be done. Here are accounts payable tips that will help reduce stress while doing these tasks.

Have a simple system to pay bills for your business. If you want to go paperless, you can use a bill pay system through your bank which will send the checks out for you.

  1. Use a separate email address for just bills. Then, when you create online accounts, use that email address as your contact. It will help eliminate bills getting lost within the vast emails you receive on a daily basis.

  2. For paper bills: Have a place to store your paper bills like a “to pay” bin. This can be a wire bin placed near your desk.

  3. For electronic bills: Have a 3-part system in place. If you receive emails with invoices attached, 1. print out the bill only once, 2. add it to the “to pay” bin and 3. store the electronic copy under the “bills to pay” folder on your computer’s desktop. By doing this, you will only have once invoice copy and are more likely to not over pay the vendor.

  4. Create a regular billing task. It can be once a week or once every few weeks. If you do it weekly, Friday afternoon works nicely. It will keep you on track and minimize the loss of any “to pay” bills.

  5. Create an efficient retrieval system: Enter all your bills separately.  Add the invoice issue date, invoice amount, and invoice number and then include it in your register. QuickBooks and QuickBooks Online allows you to add it to the vendor section on their app. You can create a spreadsheet to help manage this as well. Be sure to have a section for vendor name if you decide to use a spreadsheet. Keeping track of all the bills that come in will speed up the process of finding a particular invoice if there is a discrepancy with the vendor.

  6. Create an easy but reliable system for Petty Cash:  If you use cash often, you need a good system that will help you and your business eliminate fraud. Only have one trusted person be responsible for it. Have them reconcile it monthly to make sure it matches with the transactions on your spreadsheet. Be sure to keep the receipts for all the activities paid in cash. If you sign up for Admin News, you will receive a free PDF or Excel layout to track Accounts Payable and Petty Cash.

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Small Business Owners

Always have a savings account to store money for bills.

  1. If you have the money now and have the time to pay, just pay it now. If you don’t want to schedule payment for a particular bill, you can always allocate the money for the bill. To do this:

    a. Go to your register.

    b. Write the payee name and amount. But don’t write the check number.

    c. Then when it is time to write the check, just fill in the check number.

    By filling in the check number, it will remind you that you wrote the check.

    Another way to allocate money is to write up the check, prepare the envelope, and put a sticky note on it, saying “MAIL ON ________(fill in date)”.  Then place the envelope in an area to remind you to mail the bill on that date. I have used this method for payments that I need to bring to a vendor and it works pretty well.  No lost checks.

  2. Allocate the amount of money you need for taxes, divide that amount into quarters.  Then divide the amount into monthly installments. Schedule an automatic transfer into the savings for that monthly amount every month. It will automatically transfer it and when it comes time to pay it, you can transfer it back and pay the taxes.  Remember, if you don’t do estimated taxes, you may be penalized by the federal government, state, and local.

  3. Always, always, always pay your payroll liability on time. After you are finished your payroll, have your bookkeeper take the liability taxes out and pay the taxes right away.  The tax agencies give companies deadlines depending on how frequently you do payroll. But, you don’t need to use them, you just need to pay them on time.  It’s OK to pay your payroll liability taxes early. I have done it for years for my payroll clients. But, you can get penalized for NOT paying your payroll liability taxes on time.  Remember: this is not your business’ money.  It’s money that is for your employees and taxes that you have collected for the government and others (insurance and retirement).

I hope this inspired you to go through your accounts payable system and refine the process.  Do you have any tips you would like to share?  What did you find interesting? What would you like to try? Please share in the comments below. I would love to hear from you.

Please note these are affiliate links through Amazon, and at no additional cost to you, I will earn affiliate fees if you decide to make a purchase.

9 Things Every Owner Needs To Know About Accounts Receivable

9 Things Every Owner Needs To Know Abt Accounts Receivable

Everyone wants to be paid for their service, right? We don’t want to have to call and remind the client to send the check day in and day out.  We want our clients to be trustworthy and pay when the bill is due. At one time or another, we all have dealt with someone paying late.  It makes us feel unappreciated.  Doesn’t it?  I know it does for me.  To help you minimize your accounts receivable issues, I am sharing these 9 things every owner needs to know about accounts receivable. 

Accounts Receivable Tips

  1. Finance charges are OK to add to past due invoices. Be sure to inform the client of this charge before you start the job. Tell your clients verbally before you start and then in written form on the invoice works nicely.

  2. Schedule time once a week to invoice your clients. Picking a day, say Friday PM or even Saturday morning, will keep you on track with invoicing. I have some clients that haven’t invoiced their clients for a month or so and now they are behind. So, keep on top of this process, even if you don’t need the money at the moment because sooner or later you will be short.

  3. Use an app to track your time and it will make invoicing a lot easier. There are many apps out there to track your time so you can then import it into your invoice software. QuickBooks Pro has a nice Timesheet embedded in the app to help with quick invoicing when needed.

  4. Establish a Terms policy. This is when you determine how long the customer will take to pay the invoice. It could be net 15 days, net 30 days, or it could be upon receipt. Make sure it appears on all the invoices and contracts.

  5. Create a policy of when you will follow-up on unpaid bills. This could be a week after the due date or two weeks after the due date.

  6. Be consistent with following up. Schedule a recurring appointment each week to remind you to visit your accounts receivable area and see if there is anyone that you need to contact.

  7. Have a place for your unpaid invoices and a place for your paid invoices. There are a couple of ways you can do this. You can have one folder for all your paid invoices and one for your unpaid invoices. However, if you send many invoices to each client, your folder will get really large and will be difficult to manage. For this situation, I recommend dividing up and storing each client’s PAID invoices in its own folder. This way, at the end of the year, if there are any questions on an invoice, you can go right to the appropriate client and check out their invoice quick and easily. You can do a combination of both of these ideas if you wish. For example, if you have a client that only has 1 or 2 invoices, you can then have a misc. paid invoice folder to hold the once in a while paid and unpaid invoices.

  8. Change your mindset. You deserve the money! Even if it is easy for you to do what you do, you still deserve to be paid on time for your talent. Your business is part of you and you need to be an advocate for yourself and your business.

  9. Know when you need help getting your money. Having a good collection agency on hand will help in those, hopefully, rare occasions that you need to contact them about a way past due invoice.

Well, there you have it!  These tips help make your accounts receivable process run more smoothly and efficiently. If you want more tips about keeping your bookkeeping process accurate, feel free to check out my Solutions For Bookkeeping page.

Now, it’s your turn.  Do you have any tips that will help other readers?  Please share your tips below. I would love to hear from you.

Please note these are affiliate links through Amazon, and at no additional cost to you, I will earn affiliate fees if you decide to make a purchase.

3 Important Things You Need To Know About Data Entry

3 Important Things You Need To Know About Data Entry

I have offered bookkeeping services for about 10 years now and there are 3 important things you need to know about data entry when venturing into your new small business. You can get into real trouble if you don’t have your bookkeeping in order. Here we go.

ALWAYS start your business with a good bookkeeping application and process!

Whether it is QuickBooks Pro, QuickBooks Online, Quicken, or any other software or online service, the application needs to be established.  Spreadsheets are OK if you absolutely have to use them, initially. But know that you will need to update the system as you get busier. This may happen sooner than you think.  Another issue is it can be easily modified accidently or on purpose. The problem is when you try to reconcile your transactions with your bank account, it can get confusing trying to match up the transactions.  There is more likelihood of error too. I have experienced clients calling me in a panic because they accidently erased content from their spreadsheet. Why put yourself through undue stress? Get a reliable application that you can establish back up file copies to make sure you can restore the data.

Data Entry Consistency is key to eliminating errors.

There are three parts to this section: 1. enter data regularly, 2. use the same accounts when appropriate, 3. review on a monthly and quarterly basis.

Get help with the data entry when you feel it is getting out of hand.  Waiting until the last minute or right before tax time is not the time to get a bookkeeper.  It will cost you a pretty penny to do it this way.  They will spend a lot of time adding the data and reconcile and there is more likely that there will be more errors because of the rushed job. It’s better to get your data setup each month so the bookkeeper can spend less time per month on the task.

Use the right accounts and change accounts when appropriate.  Data entry is not just entering data, it’s also about staying consistent with your entry.  For example, if you enter Staples and you use “office supplies” as your standard account since you buy supplies at Staples for your office. When you purchase something else, like a computer, you need to change the account to “office equipment”.  Then you go back and purchase something at Staples that would be “office supplies” again, the software may pull up “Office equipment” instead of “Office supplies”.   So, you need to be extra careful to use the right account with the right transaction.  Being more detailed in your data entry will also keep your reports cleaner with  the most accurate data for your small business. If you need help with determining the right accounts, check out how to make your budget effective post for some guidelines.

Review the data monthly and quarterly to double check your work. After entering the data, you may think you are finished.  But, you really are not.  You need to follow up later with a fresh set of eyes and review the data.  This is why reconciling is so important.  You can correct any issues you may not have seen when entering the information.  Visit Making bookkeeping a priority post to give you more details about making your bookkeeping a habit.

Know when to get help with your data entry.

In the past, I worked with clients that would get so discouraged with their bookkeeping that they would just stop doing it. Then, at the end of the year, they would spend weeks on setting up the paperwork for their accountant and undoubtedly lose something or miss something.  I would then come in and help them gather their items.  It would take me hours, even days to correct the problems, which would cost a small fortune for one year of work. So, knowing when you need to get help with data entry is key to saving you money and time.  Here are some questions to ask yourself to determine if you should outsource your data entry/bookkeeping tasks.

  1. Do I forget to update the bookkeeping software on a weekly basis?
  2. Do I forget to reconcile each month?
  3. Does my accountant have issues at the end of the each year?
  4. Does my accountant have to spend many hours figuring out what I did?
  5. Do I spend a large amount of money on having the accountant do the corrections for me?

If you answer “yes” to these questions, you are a good candidate for this service. Feel free to check out my bookkeeping service.

Please note these are affiliate links through Amazon, and at no additional cost to you, I will earn affiliate fees if you decide to make a purchase.

3 Important Things You Need To Know About Data Entry

US Small Business Adm.-How To Use This Great Resource for Small Business

SBA - How To Use This Great Resource for Small Businesses

There are many helpful resources for small businesses out there on the internet. But, this one from the US Small Business Administration is great for any startup or established business. It also has a Spanish translated page if you prefer. Did you ever check it out? Here is a brief description of what this site has to offer.

How To Use This Great Resource for Small Businesses

If you are just starting your business, check out Starting a Business section. It has several tips on how to start a business, how to write a business plan, how to register your business, filing and paying taxes, etc…

It also gives you tips on running a business under the Managing your Business section, growing your business, and other business law and regulations. It even has a business guideline section by industry.

This site has a section just for Loans and Grants. Which gives you more information about loan programs, and what you need to apply.

If you plan on working with the government in your small business, there is a Contracting section on the website to help you. There are tips on finding government customers, resources for small business with the government. And, answers may questions you may have regarding this type of service.

And, my favorite section is the Learning Center. I have gone there often to research information for my business and directed several small business owners to check out this section as well.

This section has several videos and is all about helping you, as a small business owner, succeed in your small business. The topics are Financing, Government Contracting, Managing a Business, Marketing, and Starting a Business. There are various videos in this section of the website.  The videos run 30 minutes and have several tips on different topics.  Here are just a some of them:

A Guide to SBA’s Disaster Assistance Programs

Establishing Values for Your Business

Taking a High-Tech Product to Market

Introduction to Pricing

Understanding Your Customer

Encore Entrepreneurship for Women

Young Entrepreneurs

There is a section called Analyze Your Business.  It shows how you stack up against your competition to succeed. It’s an interesting section, you can fill out this size up section without signing in or you can sign in and really see the entire picture and how well you are doing compared to your competitors in your area.

For more information, check out Business USA for even more information to help our growing business.

I hope this helps you with the success of your small business. It may seem overwhelming but remember you don’t need to visit every page all at once.

Please note these are affiliate links through Amazon, and at no additional cost to you, I will earn affiliate fees if you decide to make a purchase.

Quick Tips For More Effective Time With Email

Quick Tips for more effective time with email

The other day I was speaking with my client and we got on a topic about how to make emails retrieval and organizing easier to manage. While using the search bar is helpful, having an effective system will get rid of your unwanted emails quickly and allow you to see what needs to be focused on.  But, you may ask, “why do I need to determine a system?” Having an effective system for your email will help in several different ways.

Benefits of having an effective system for emails:

  1. It will help you improved focus –  if you are the type of person that gets distracted easily, having a structure and keeping to the system will make it easier for you to focus.
  2. It will help you have a seamless transition from one project to another – by having a system, you will be able to transition between different projects quickly and therefore save time and money.
  3. When your business grows, the process can expand – I have used this system for over 7 years and I have been able to implement it when my business grew.
  4. It will help you speed up how long it takes to read / review your emails. No one likes to read emails so any process that will help reduce how long it takes is one to try, don’t you think?

By setting up the steps below, it will help you and your business personnel speed up the process of reviewing emails.

First, think of the main area where the emails load as your current inbox.

Like a physical inbox, you add papers to the bin and then sort them into different areas, like to read, to file, and to take action. When people don’t see the emails, they tend to forget about them. So, keeping the current emails that need attention right in front of you will help you not lose any important emails.

Second, create “Folders” for long-term use.

This is like folders in a filing cabinet. Use these folders to store any email you wish to keep.  This can be correspondences from clients, vendors, employees, or associates. Some folder names could be called: client names, social media site names, membership sites, topics like bookkeeping, bills to pay, etc…  Click here to learn how to make folders in Microsoft Outlook. Google Gmail uses the term “Label” as folders. Click here to learn how to set up labels. Click here to learn how to set up “Folders” in Thunderbird (a free email management software).

Next, use Categories for your current emails. 

Think of categories like book index titles. It will help you sort the emails into like topics. This could be emails that are from different clients.  Creating a list of categories for your emails and consistently using them will keep your current emails organized in your inbox area.  And, therefore easily accessible when needed. For Microsoft Outlook, click here to read the easy instructions on how to use categories.

Then, set up Rules for junk emails.

Some software may use a different term than “Rules.” Some may call this task “Filters”. Rules(filters) are automatic tasks that will move emails to a particular folder or another area without you having to do anything manually. Rules are great when you don’t want to look at all the general emails. This could be emails from stores, from bloggers, etc…

To use this feature, I like to create the folders or labels first for your junk mail.  Some examples of folders could be: Coupons, Social media blogs, Google Alerts, etc…

Click here to learn how to set up “Rules” in Microsoft Outlook.

Click here to learn how to set up “Filters” in Google Gmail.

Click here to learn how to set up “Filters” in Thunderbird.

I hope this helps you get your emails under control.  Let’s continue the conversation. Do you use Folders, Rules, or Categories?  What do you recommend when organizing your emails?  Do you have  a large inbox?  How many emails do you have?  Please leave a comment below and share your thoughts. I would love to hear from you.

Please note these are affiliate links through Amazon, and at no additional cost to you, I will earn affiliate fees if you decide to make a purchase.

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