Accounting and Cash Flow Management
I will first encourage everyone to use some accounting software to record all money coming in and going out. This will be how you create invoices for your customers. You should always have contact information for your customers which includes an email address.
Once you have an email address you will then be able to email them an invoice. On the invoice should be a way for them to pay you by debit or credit card. There are fees involved with collecting money this way. You can shop around for the lowest rates and once you have a processor you can now accept these forms of payment. Your credit will affect the rate that some places will charge you to collect your money.
How does this help? Once your customer gets their invoice all they need to do is click the pay button and it will bring them to where they enter information and press pay. Once that is done you should see the money in your bank in about 5 to 7 business days. You will see your average collection time drop if you are still mailing bills and waiting for a check in the mail. Think about the time and money in postage saved when you email bills and have a click and pay option on the invoice.
There is one thing to mention. If you are collecting a very large payment I would suggest using the ACH method where the customer gives you the information from a check and the money is directly taken from the checking account and put in your bank account. I know that Intuit offers this as a service and the fees are a few dollars per transaction. It is worth it when dealing with larger transactions. You may want to even consider charging a processing fee for people who pay this way. A few dollars will not be a big deal to most people. This will help in covering the costs of accepting these forms of payment. Once you have been with a processor you may be able to negotiate better terms.
This is one way to help manage cash flow. There are other ways that will be discussed in future posts. It is well worth the taking the time to get those email addresses in your accounting system. If you do not have an accounting system now is the time to set up your system.