Are you sick of losing money to poor bookkeeping?
If you’re like most small business owners you know keeping clean records is important. What you might not realize is just how much bad record-keeping is costing you. With sloppy records you’ll struggle with:
- Missed payments and lost revenue
- Tax penalties and audit headaches
- Cash flow problems that can shut you down
…and the crazy thing is, these problems are 100% preventable.
Here’s how to start keeping clean records…
What you’re going to learn:
- Why Good Record-Keeping Matters (More Than You Think)
- The Real Cost of Poor Invoice Tracking
- How Invoice Tracking Software Protects Your Business
- Build a Rock-Solid Record-Keeping Process
Why Good Record-Keeping Matters (More Than You Think)
Bookkeeping isn’t nearly as glamorous as the actual work you do every day running your business. It’s a chore. And yeah, it’s easy to neglect.
But clean record-keeping does a lot more than just satisfy the IRS. Here are the top benefits of keeping accurate records:
- Track income and expenses: Keeping good records makes it easy to know exactly how much money you’re bringing in and where it’s going. This is essential for tax time, and you’ll never miss a deduction again.
- Smarter business decisions: Accurate financial records arm business owners with the info they need to plan for the future, grow the business, hire employees, and more.
- Stay tax compliant: The IRS recommends keeping records for up to three years. Disorganized bookkeeping during an audit can lead to fines, penalties, or worse.
Keeping clean records matters. A lot.
Invoice tracking is one of the most important components of record-keeping. Utilizing an excellent invoicing program makes it easy to track payments, monitor outstanding invoices and keep financial records accurate from day one.
Fail to implement some sort of invoice tracking system and your records will quickly become a nightmare.
The Real Cost of Poor Invoice Tracking
It may not feel like it when you’re in the thick of it, but poor invoice tracking costs small businesses countless dollars every single year.
Delayed or missed payments can destroy cash flow, prevent business growth, and even force you to shut down.
The US Chamber of Commerce reported that cash flow disruptions impact 88 percent of small businesses. That’s almost nine out of ten companies suffering from poor money management.
And if that isn’t bad enough…
Did you know the majority of that cashflow disruption is caused by unpaid invoices?
Here’s how it happens:
Customers who are sent invoices manually often delay making payments. When you’re tracking invoices by hand, it’s easy to lose track of who owes you money and how much.
Think about how often you miss send an invoice because you misplaced a receipt or didn’t get around to it.
When invoices aren’t managed properly:
- Customers forget payment is due
- Payment deadlines are missed
- Business owners are left scrambling
That’ll destroy your cash flow immediately.
Invoice tracking software makes it simple to stay on top of who owes you money and quickly identify outstanding invoices that need to be paid. Your customers get invoices instantly and payment reminders are sent automatically.
How Invoice Tracking Software Protects Your Business
Think about how much time you waste chasing after clients for payment. Even when you do get paid, it takes a long time.
Invoice tracking software improves your business in three key areas.
Cash Flow
Tracking invoices gives you complete control and visibility over your payments. Every invoice that goes out is tracked and monitored automatically.
There are no more surprises. When you know who owes you money and how much you’re able to forecast your cash flow.
You’ll also be able to plan for expenses rather than just reacting to problems as they happen.
Faster Payment
Did you know the method you use to send invoices impacts how quickly you get paid?
Manual invoicing takes weeks. Electronic invoices that are sent through software are usually paid much faster.
QuickBooks found that 56% of SMBs are owed money through unpaid invoices. That’s more than half of all small businesses!
Invoice tracking software helps businesses get paid faster by allowing you to send invoices immediately. Payment reminders are sent automatically and you’ll spend way less time chasing after clients.
Audit Ready
Nobody wants to get audited. But doing everything else on this list and keeping clean records will make the process quick and painless.
Tax software keeps every purchase organized and easily accessible. This means:
- You won’t have to dig through stacks of receipts
- Every transaction is remembered
- Your records will be audit-ready at all times
Building a Bulletproof Record-Keeping Process
Now that the importance of keeping clean records and tracking invoices is covered… Here’s how to actually do it.
Go Digital
Handwritten notes and paper invoices may have worked in the past, but times have changed.
Storing physical documents is risky. What happens if your hard drive crashes? Or worse – gets stolen?
Everything you need to keep your business organized can be found in one digital location. You can access your records from anywhere, anytime and they’re searchable!
Automate
Keying information into your computer is a headache and a huge source of errors.
Invoice tracking software allows you to:
- Automatically generate invoices
- Send payment reminders on time
- Match payments to invoices
- Flag delinquent accounts instantly
By simply automating these three things you’ll save yourself hours of admin work every week.
Monthly Review
Clean record keeping doesn’t just magically happen. It takes a monthly review to keep your business finance healthy.
Set aside a few hours each month to review your accounts. Catching mistakes early is much easier than during tax season when you have hundreds (or thousands) of transactions to go through.
Personal vs. Business Finances
Who doesn’t love filling out their taxes? Keeping personal and business finances separate is important for accurate record-keeping.
Open up a business bank account and use it strictly for business related transactions. This makes keeping track of your business income and expenses a whole lot easier.
Wrapping It Up
Neglecting your books will cost you in more ways than one. Not only does poor record-keeping destroy cash flow and profitability, but it also makes tax time a living nightmare.
Keeping clean records is simple when you:
- Use an automated invoicing system
- Go digital
- Keep your business and personal finances separate
- Review your records each month
Invoice tracking keeps your books clean, improves cash flow and speeds up payment. Small businesses who implement a reliable invoicing system are destined for success.
Don’t be that business that ignores their books. Keep your records clean once and for all.