In today’s fast-paced business world, managing cash flow effectively is essential for maintaining a healthy financial state. One of the best ways to ensure timely collections and payments is through accounting automation. Here are some easy accounting automations that can help improve your cash flow and streamline your financial processes.
Automated Invoicing
Why It’s Great: Reduces manual errors and ensures invoices go out on time, speeding up the payment process. Use accounting software to automatically send invoices as soon as a service is completed or goods are delivered. Depending on your accounting software, there are different ways to do this, make sure you are checking to see if your software has this.
Recurring Billing
Why It’s Great: Perfect for subscription-based businesses, ensuring a consistent cash inflow without manual effort. Set up recurring billing cycles for your regular customers using your accounting software. This can also be done in your payment processor itself as well, an example is Stripe or Authorize.net.
Automated Payment Reminders
Why It’s Great: Decreases late payments by sending regular reminders to customers. Configure your accounting system to automatically send payment reminders before and after the due date. Quickbooks can even show if it has been opened and when the most recent opening was.
Credit Control Automation
Why It’s Great: Helps monitor credit limits, prevent over-extensions, and manage credit risks efficiently. Use your accounting software to track customer credit limits and send alerts when those limits are approached or exceeded. Even the most basic accounting softwares including Zoho and Wave have this feature.
Payment Reconciliation
Why It’s Great: Simplifies matching incoming payments with outstanding invoices, reducing discrepancies and manual work. Integrate your accounting system with your bank to automatically reconcile payments with invoices.
Cash Flow Forecasting
Why It’s Great: Provides a clear view of future cash flow, helping you plan for upcoming expenses and investments. Utilize accounting software with cash flow forecasting tools to predict future cash inflows and outflows. Although some accounting software has this as a built-in feature, there are many third party programs that specialize in cash flow forecasting and are worth a look.
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