As a business owner, one of the recurrent tasks is handling money from clients. Customers pay bills through credit cards, cash, monthly installments if available, and so on. Billing systems and software have led to improved business financial management. Gone are the days when we would present to the accountant loads of receipts and bank statements with some gone missing through the year.
Why do you need a billing system for your small business?
A billing system ensures that you provide a streamlined way for your customers to pay for the goods and services they get from your business. This makes billing systems important for small business because they allow:
- Administrative supervision and control overpayments, as well as payment tracking
- Transparency in payment-agreement between small businesses and their customers
- Small businesses to optimize their operations, together with their reporting practices
- Automation of billing process, which helps to minimize errors automatically by compiling estimates and costs
- Small businesses manage their cash flow easily than when using manual invoicing
In this article, we inform you of the five things you should know about billing systems. These will help in making an informed decision while choosing your billing system. Read on for more information.
Recording and verifying data
Tracking your clients’ orders requires you to have their information. You need to create a profile for each client with their name, billing address, expected mode of payment, and third-party details. A third party can be the insurance company that compensates you in case of the client’s default. You should thus verify the details you get from the client and ensure they are reliable. You also need to have the order details such as the product or service name, quantity, price, and any other info. Your billing software should be able to store this info for retrieval when the need arises.
A code system
Using codes to categorize products and services makes the tracking process easy. It also helps in analyzing how the spending of your business resources. Whether you want to pay a pending bill or claim from a client, you need to have a code system that works for you. In a beauty parlor, for instance, you can have codes to represent different services. Such services include hair treatment, nail polish, spa treatment, supplies, and so on.
Tracking orders and payments
The major function of the billing system is tracking your clients’ orders and payments. You can program your system to notify you of pending bills approaching their due dates. This way, you can identify who to send a reminder, and when. It also helps you identify clients who default payments. A computer-based system can send payment reminders to clients whose bills are overdue. It will also remind you of pending bills that you should settle. This system saves you the time spent on books and receipts while trying to retrieve client data.
Financial systems contain sensitive info and can access lots of private data about your clients. Such info includes; credit scores, amount of income, and social security number. Your billing system should ensure the safety of such information. The data should be available only to a few authorized officers. The system should be up to the standards of the payment card industry in case your business accepts credit card payments. It should also run regular updates to keep the network and data safe from hackers.
Terms of payment
As a business owner, it is important to develop payment terms that work well for your business. The initial 20 or 30-day waiting period is no more. You can now set a shorter and more reasonable period of 7 days or any other period that works well with your business. For instance, a business that requires constant restocking cannot allow long payment periods, as this may affect the normal running of the business. The terms you set should state the due date, mode of payment, penalty in case of default, late fees, and so on. State them to your clients when offering the product or service, and when sending the invoice.
People managing small businesses should know these top things about billing systems. However, before choosing your preferred billing system, it’s important to analyze the needs of your business.
- Why do you need a billing system for your business?
- Do you need it for invoicing or accounting purposes?
Analyzing your accounting needs will help you answer these questions. Also, you should extend this evaluation to the transactions with your employees.
As said earlier, you will need to consider the security of your billing system. Since you will be exposing your financial information to software, your business will be at a risk in case of a security breach. Please note that your billing software will have sensitive information like accounting data, balance sheets, and account details, among other information.
Therefore, you must make sure that the billing solution that you choose is safe and secure. So, before integrating any billing system such as telecom billing software, Kansys with your business, take your time to analyze its security features. Above all, do your research and read customer reviews before deciding on which billing software to buy.