End Your Year Like A Business Pro
Guide 3: Customers
Your customers are your whole business.
They are the reason you open your doors each day.
The life of the party.
Your most prized list of people.
And the reason you are able to pay your bills, your employees, and open again tomorrow.
It’s wise to pay a little attention to this list each year and make sure you’re checking on some key metrics.
From a business perspective, this means business opportunities.
From an accounting perspective, this means cash flow opportunities (or problems).
Let’s talk more about those accounting perspectives.
There are a few things to look at, we’ll work through them in a logical order here.
First things first, you want to make sure to collect any outstanding invoices due.
Clearly you want your customers to pay you on time. There are many reasons this important, with respect, customer satisfaction, and a continuing relationship leading that list. However, the main reason you want your customers to pay you is so you can pay your bills.
If you have outstanding invoices, or frequently have customers who are late on payments, this is something to consider improving immediately.
A quick payment time is best.
Think of it like this: If your clients don’t pay you, you can’t pay your bills. It’s simple. No cash coming in leads to cash flow issues, problems with your vendors, and could negatively impact your business in ways you don’t want.
Taking time to collect your invoices will help you improve your business position immediately.
Collecting after 90 days is a big indicator that you might not get paid at all, which is not ideal.
The second thing to address with your customers is updating your customer list.
You may ask why this is important, especially from an accounting standpoint.
Well, in order to keep good, clean financial records, you need to have complete and accurate information about the people you sell your products and services to.
If you don’t have an organized customer list with address and emails that are correct, you won’t be able to send them invoices, create business messages, or indicate in your financial records who paid you money.
These activities are very important to your financial database, so it is important to take a few minutes to collect overdue invoices and update your customer list each year.