Here at Direct Peak we work closely with Xero and offer Xero accounting services in Peterborough to small and medium businesses. Xero have recently been analysing over 12 million invoices to discover some revelations about getting paid on time. They also asked small business owners for their own tips and tricks too.
As accountants offering Xero accounting services in Peterborough we want to help our clients achieve more with their businesses and accounting software. We have put some of these invoicing tips for small businesses together for you to help you get paid on time or sooner;
However, before we start we’d like to make you aware of the fact that almost half of all invoices are paid late. While some businesses are great at getting paid what they are owed on time, other businesses are waiting weeks or months to get paid. It’s important to bear this in mind when you are reading these tips as it could help you be one of the businesses that gets paid on time, every time.
- Make sure you send out your invoice payment terms before work begins. In this document you can set out the tone for the transaction such as what forms of payment your will accept, the currency or currencies you deal in. Also include what your late-payment penalties are and if you charge them as well as when from.
- It is essential that you are clear on your due date too as this is when you are expecting the client to pay you by. While 30 days is more common among small businesses, this is changing.
- Between 70% and 80% of businesses give 2 weeks or less as their payment terms and more than half of those businesses request their payment within 7 days. If you are serious about business and work hard to meet your client’s deadlines, why shouldn’t you be paid quickly?
- Remember however, it doesn’t matter how short or long your payment terms are – if you don’t send the bill on time then you won’t get paid. The payment clock doesn’t start ticking until they have received the invoice. Why not use templates through Xero that enable you to speed up your invoicing process so you can send invoices quicker and get paid quicker too?
- It is okay to chase payments from your clients. You don’t need to wait until they are 1 month late before you can start chasing. You could set up a friendly reminder email as the payment due date approaches and then follow up again as they go past the due date. If you don’t have the time to chase, or to save you time from chasing outstanding payments why not use Xero to automatically send reminder emails for you?
If you need help with invoicing, your invoicing process or chasing payments then why not give us a call? As a business offering Xero accounting services in Peterborough we would be happy to help you with advice, guidance and support.
Invoicing tips for small UK businesses
As a small UK business, invoicing is a critical aspect of your financial management process. Here are some invoicing tips to help you streamline your invoicing process and get paid on time:
- Use professional invoicing software: Invest in a professional invoicing software that allows you to create and send professional invoices quickly and easily. Some of the popular invoicing software for small businesses includes Xero,
- Include all necessary details: Make sure your invoice includes all necessary details, including your business name and address, the client’s name and address, an invoice number, the date of the invoice, a description of the goods or services provided, the total amount due, and payment terms.
- Set clear payment terms: Clearly state your payment terms on the invoice, including the due date and any penalties for late payment. Consider offering early payment discounts to encourage prompt payment.
- Follow up on late payments: Don’t be afraid to follow up on late payments. Send friendly reminders to clients who have not paid on time, and consider using a collections agency or legal action as a last resort.
- Keep accurate records: Keep accurate records of all your invoices and payments, and reconcile your accounts regularly. This will help you track your cash flow and ensure you get paid on time.
- Make it easy for clients to pay: Offer multiple payment options, including bank transfer, credit card, and PayPal, to make it easy for clients to pay. Consider adding a “Pay Now” button to your invoices, allowing clients to pay online with just a few clicks.
Looking for business accountancy services
Direct Peak provides a dedicated business tax accountant, who will prepare your annual accounts and tax returns. They will be on hand to answer any tax queries you have.
Your business tax accountant will ensure that the company is set up in the most tax-efficient way and that you are claiming for all the correct expenses to maximise your earnings.
Xero Accounting Services in Peterborough – About Xero
Xero is a cloud-based accounting software platform designed for small and medium-sized enterprises (SMEs). It provides businesses with a range of tools and features to manage their financial activities efficiently. Here are some reasons why Xero is considered a good accountancy package for SMEs:
- Ease of use: Xero offers a user-friendly interface with intuitive navigation, making it accessible for users without extensive accounting knowledge. It simplifies financial tasks, enabling business owners to manage their books easily.
- Cloud-based platform: Being cloud-based, Xero allows users to access their financial data anytime, anywhere, as long as they have an internet connection. This flexibility is particularly useful for SMEs that may have multiple locations or remote teams.
- Real-time collaboration: Xero enables seamless collaboration between business owners, accountants, and other stakeholders. Multiple users can work on the same data simultaneously, facilitating better communication and enhancing efficiency.
- Bank feeds and automatic reconciliation: Xero integrates with banks and financial institutions, automatically importing transactions and bank statements. This feature saves time and reduces errors by streamlining the bank reconciliation process.
- Extensive integrations: Xero integrates with numerous third-party applications, such as payment gateways, point-of-sale systems, e-commerce platforms, and customer relationship management (CRM) software. This integration capability allows businesses to customise and expand their accounting system as per their specific needs.
- Reporting and analytics: Xero provides a range of customisable reports and financial dashboards, offering insights into business performance. Users can monitor key metrics, track cash flow, generate financial statements, and make data-driven decisions to support business growth.
- Scalability: Xero caters to businesses of varying sizes, from startups to larger SMEs. As a business grows, Xero can accommodate increased transaction volumes and offer additional features through its various subscription plans.
- Security and data backup: Xero prioritises the security of user data. It employs bank-level encryption, regular data backups, and other security measures to protect sensitive financial information.
- Collaboration with accountants: Xero facilitates collaboration between businesses and their accountants or bookkeepers. Accountants can access real-time financial data, provide advice, and assist in financial management, enhancing the overall accounting process.
Overall, Xero’s user-friendly interface, cloud-based accessibility, extensive integrations, real-time collaboration features, and robust financial management tools make it a popular choice for SMEs seeking an efficient and scalable accountancy package. For more information on Xero accounting services in Peterborough contact Direct Peak