Making a sale can be hard—but to get paid in timely fashion is often even harder, as business owners know. Statistics show that cash-flow problems and poor cash management are key reasons that small businesses fail.

“Lots of small businesses still use manual processes for their invoicing,” says Tim Singleton, CEO of Strive Technology Consulting in Boulder, Colorado. Not only is that method time consuming, it also increases the odds that customers will pay late—or not at all. “You need to make paying easy for them,” Singleton says.

The good news: Affordable technology enables small businesses to streamline their accounts receivable (AR) process while ultimately improving their collections. To reduce the chance of error and save time, be sure any AR-related software you choose integrates seamlessly with your company’s accounting software.

Here are five automated AR tools to consider:

1. Automated Invoicing

An automated invoicing program allows you to quickly generate and send new invoices that are customized with your business logo and information. These solutions often wrap in handy features like notifying you when a customer has viewed or paid an invoice, and sending automatic late payment reminders. Solutions geared to small businesses include Due and Zoho Invoice. Many accounting software programs, including FreshBooks and QuickBooks, offer automated invoicing as one of their services.

Keep in mind that automated invoicing solutions generally offer built-in analytics that allow you to keep tabs on your accounts receivable—such as the percentage of invoices that are overdue and by how long—and integrate that information with other business analytics, such as customer account sizes. Most solutions also allow you to create customized reports based on the data you want to review.


2. Online Payments

The easier you make paying bills, the more likely customers will pay them promptly. Consider offering an online bill-pay feature and mentioning it on your invoices. PaySimple and PayPal offer secure online payment features, and many accounting software programs also offer online payment capabilities as a feature.


3. Automatic Recurring Payments

If you have ongoing contracts that call for regular billing, consider providing a way for customers to keep their credit card or bank information on file and pay their bills automatically. Small businesses generally don’t want to store credit card information, Singleton says, because they then must comply with government payment security regulations. But they can outsource automatic payments to a third party. PayPal, Due and QuickBooks all offer recurring credit card and/or ACH (automated clearing house) electronic bank transfer payments.


4. Time Tracking

If your invoicing is based on how much time you spend on a project, software programs and apps can help you keep track of your time while syncing with your invoicing software. FreshBooks offers time-tracking software, while QuickBooks offers various time-tracking apps in its app store. Utilizing a time-tracker can speed up your invoicing process, because you don’t have to manually add up time spent on projects and can get invoices to clients more quickly—and then a stand a chance of getting paid sooner.


5. Sales Tax Compliance

Depending on where your customers are, you may need to charge sales tax in many different jurisdictions at different rates. Avalara software allows small businesses to easily calculate sales and use taxes, and integrates with many invoicing and ecommerce programs.



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