Demystifying Billing And Receivables Solutions For Your Small Business
There are many issues that keep entrepreneurs and small business owners up at night, but amongst the most pressing must be financial ones.
The recently released Small Business Barometer from Western Union Small Business Payments gives us an interesting insight into financial matters faced by small businesses. According to the survey:
- Worrying over revenue generation (46-percent) and positive cash flow (17-percent) keep small business owners up at night,
- 55-percent report forgetting to invoice a customer; 66-percent invoice late,
- 42-percent have past due invoices,
- 37-percent neglect other priorities to address collections; 16-percent don’t like the confrontation,
- 60-percent of businesses are funded by personal savings.
86-percent of business owners report neglecting to invoice a customer in the past year and 43-percent say 5-percent or more of their customers are late in payment on an average month. Keeping on top of receivables and payments is possibly the most critical activity for a business and one that many report dropping the ball on. Look for a solution that helps your customers by accepting a spectrum of payment options online (even if you don’t have a website), from credit cards, to electronic checks – at midnight, on a Sunday, instead of solely during your business’ hours.
Look for a billing and payment solution that offers automated services to ensure the monthly invoices, reminders and receipts can be sent simply and efficiently. Also, provide customers the ‘automatic debit’ option for their convenience… and yours. Solutions that require minimal set-up time and have recurring features will enable you to have more time to focus on the other components of your business… like the reason you started your business.
Know customers… better.
Look for a customer relationship management tool with customizable components to track customer’s behaviors and preferences. Use the tool to create a reporting schedule and view and update it monthly or quarterly. The receivables and payment solutions you want should have integrated CRM functions to help you, in seconds, better understand your customer – and their purchase history, preferences and challenges. Over time, this will translate to increased sales, stronger relationships and more.
Not every solution will help you communicate with your customers. Fifty four percent of small business owners want to improve their marketing. Look for a seamlessly customizable one that provides the opportunity to market to and educate your current customers, as build brand recognition by including your logo. Offer referral discounts, updates and general info that will help you retain and grow your customer base.
Today, pricing for this type of solution makes it accessible to many small businesses. Look for a solution that charges a flat monthly rate for all services, for unlimited users and competitive credit card transaction fees. Read your merchant agreement thoroughly and examine the fine print; make sure you are comparing apples to apples. As your company grows, your solution will grow with you.
More than 30 percent of small business owners believe 2012 will be a good year for business. Implementing a financial strategy will help make this belief a reality.
Daniel Goh is the founder and chief editor of Young | Upstarts, as well as an F&B entrepreneur. Daniel has a background in public relations, and is interested in issues in entrepreneurship, small business, marketing, public relations and the online space. He can be reached at daniel [at] youngupstarts [dot] com.