5 Ways In Xero To Manage Accounts Receivable Accounts Receivable In Xero Must See!

Summary

This video offers five strategies to manage account receivables effectively, ensuring timely payments for small businesses. It emphasizes simplifying payment processes with various services like credit cards and Polly for bank transfers, setting up automated email reminders for overdue invoices, proactively following up with clients, checking their credit history, and using statements instead of repeated invoices for clarity. These methods aim to reduce late payments and improve cash flow.

Takeaways

• 💼 Make it easy for clients to pay: Offering various payment options, including credit cards, can improve cash flow despite the fees involved.
• 🔗 Set up payment services: Utilize services like PayPal, Stripe, and others that integrate with accounting software to facilitate easy payments.
• 💳 Consider non-credit card options: Polly payments, for instance, offer bank transfer options that are convenient and less costly than credit cards.
• 📧 Send email follow-ups: Enable and customize automated email reminders for overdue invoices to prompt clients to pay.
• 🗓️ Customize reminder settings: Adjust the timing and tone of reminder emails to suit your business relationship with clients.
• 📞 Personal follow-ups: Regularly check on overdue accounts and personally contact clients to discuss payment issues and timelines.
• 🔍 Check client credit history: Use features within accounting software to assess a client's creditworthiness and manage risk.
• 💡 Add fees to invoices: For platforms like eBay, include payment processing fees in the invoice total to pass on costs to clients.
• 📈 Use statements instead of invoices: Send monthly or weekly statements to provide a clear overview of outstanding balances and payments.
• 🚫 Avoid sending duplicate invoices: Sending the same invoice multiple times can be unprofessional and confusing for clients.
• 📝 Keep records of communications: Note down client commitments and follow-up actions to track payment promises and next steps.

Q & A

What is the average payment delay for businesses in New Zealand according to the small business insights by Zero?

The average payment delay for businesses in New Zealand is 8.9 days.

Why is it beneficial for businesses to accept credit card payments despite the associated fees?

Accepting credit card payments can improve cash flow and make it easier for clients to pay, which can lead to receiving payments earlier, outweighing the fees charged by the credit card company.

What is one of the payment services mentioned in the script that facilitates bank transfers?

Polly payment is mentioned as a service that facilitates bank transfers, making it easier for clients to pay through their internet banking.

How can businesses set up different payment options in Xero?

Businesses can set up different payment options in Xero by navigating to the 'Payment Services' section under 'Settings' and selecting from the list of available providers.

What is the purpose of enabling invoice reminders in Xero?

Enabling invoice reminders in Xero helps businesses to automatically follow up with clients who have not paid their invoices by the due date, improving the chances of timely payments.

What customization options are available for invoice reminders in Xero?

Invoice reminders in Xero can be customized in terms of the number of days before the due date to send the reminder, the tone of the email, and the inclusion of specific information such as contact name, company name, invoice number, and total amount.

How can businesses manually follow up on overdue invoices in Xero?

Businesses can manually follow up on overdue invoices in Xero by clicking on the overdue amount in the dashboard, accessing the client's details, and contacting them directly to discuss the payment.

What is the significance of checking a client's credit history in Xero?

Checking a client's credit history in Xero helps businesses assess the risk associated with a client, ensuring they have a good credit standing before proceeding with business transactions.

Why is sending a statement preferable to sending multiple invoices for the same outstanding amount?

Sending a statement is preferable because it provides a clear overview of the outstanding balance and reduces confusion for the client, making it easier for them to understand and make the payment.

How often should businesses send statements to their clients according to the script?

The script suggests sending statements on the first of each month or, if preferred, on the first of each week.

What is the recommended action when a client requests to resend an invoice that they claim not to have received?

The recommended action is to resend the invoice with just a few clicks, ensuring the client has the necessary document to proceed with the payment.