Running your own business requires many efforts that go beyond selling a product or service. One is to know a necessary procedure: invoice. The issuing of invoices must be done regardless of how you control the company’s accounts: whether manually, through a financial management platform or by accounting outsourcing services.
In general, the billing flow occurs in two necessary steps: issuing a budget and issuing an invoice. If your company delivers quotes or pro forma invoices, they will be the first phase of the billing cycle. If there is no delivery of quotes or pro forma invoice, the first step will be to issue the invoice.
In this post, we have prepared some guidelines. You will also find management tips that will facilitate the invoicing process daily.
Processing your company’s invoices: is it worth it?
Invoice processing is not usually the most exciting topic for most small business owners or self-employed workers. For this reason, this is a subject that is often considered secondary.
However, your company’s invoice processing is vitally important. The best way to process these invoices is by creating a sound system for creating, sending and tracking them. The more well-designed your company’s invoice processing is, the faster you can receive your payments. It contributes positively to the financial status of your business.
Outsourcing invoice processing can facilitate your entire business operation:
- The company saves time and costs with outsourcing invoice processing.
- Apart from time savings, the company can focus more on internal work.
- Outsourcing invoice processing guarantees ZERO error rate.
- Productivity and employee sustainability are guaranteed.
- No need to maintain internal accounting team, save costs.
- Outsourcing invoice processing is transparent and offers you better insights.
- Proper handling of data collection and timely delivery.
The efficient management of invoice processing is of great importance. Indeed, several of these advantages are obvious, such as improving cash flow through proper management of customer charges or controlling purchasing costs by obtaining prompt payment discounts, etc. The invoice processing guarantees your client proof of the closing of the deal. More than that, it is a record of the commercial transaction for the Tax Authority, which will collect taxes from the amounts represented in that document.
Will you still ask whether the invoice processing for a company worth it or not?
Account payable and account receivable: what are they?
Let’s start this text with two questions, theoretically:
Do you know how much your company has to receive this month?
Do you know which bills should be paid until the monthly closing?
They may seem very basic, but if you do not know how to answer these two questions correctly, it means your company is lacking financial control. Efficiently managing accounts payable and accounts receivable is an activity that should be part of your daily life. So that there is no doubt about the meaning of accounts payable and accounts receivable, let us recall their concepts and the difference between them.
Accounts payable – An account payable means a financial obligation assumed by the company, such as the payment of employees, electricity and raw materials.
Accounts receivable – The account receivable is one that is already expected to enter cash, such as instalment sales and interest on investments. For a smooth business process, you can outsource account receivable services online in affordable packages.
When they are placed side by side, it is possible to see clearly if your enterprise is sustainable. That is if you will have enough money to settle financial obligations and keep the business open without the need for outside help. Is it clear how accounts payable and receivable from a company work?
How to track accounts payable in invoice processing?
It takes a good deal of dedication to make sure everything goes smoothly. So, the first step in understanding how to work with accounts payable and receivable and take control is to record everything your company will need to pay in the coming days and months. If possible, forecast accounts payable for one year and schedule periodic reviews every three or four months. The more data you can advance, the better it will be for you to see the future. And don’t forget to enter due dates, so you’ll know the exact day you need to pay the bills.
Track accounts receivable in invoice processing
All instalment sales and other income, such as interest on investments, must be organized by the dates of entry. One of the main objectives of this is to control receipts and bad debt. Because with everything in hand you know exactly the amount you need to have in cash in each period. In practice, the management of receipts is very similar to that of payments; only here you play the role of the creditor.
Sometimes errors can occur, and an invoice can be issued with incorrect amounts. With outsourcing accounting program, you can stay assured of smooth and transparent invoice processing for your company.