As you bring on employees – or even expand your business, there are some aspects that get lost if there are no proper systems in place. Surprisingly, one of the most common issues experienced by rapidly growing small businesses is a lack of adequate billing.
A lack of adequate billing can look like missing invoices, lack of follow-up on late payments, and general unintentional neglect of protocol that can end up biting your business in the butt if left unchecked. Here’s what you need to know about dealing with an unintentional billing hiatus and how to get back on track:
A billing hiatus is essentially when you’ve managed to either skip on invoicing your clients in a timely manner or you have not followed up on unpaid invoices – or a mixture of both. It’s common when a business is in a period of rapid growth or when a business is onboarding new team members for tasks such as those to slip through the cracks, typically because it’s assumed that someone would have caught it.
Unfortunately, these billing mishaps can happen and lead to unintended consequences such as a sudden period of slow or no cash flow, delayed late payments, and delayed legal action due to missed timing.
The very first thing you need to do is identify all missing invoices, missed payments, and overdue payments including how late they are, and begin to organize in order of time sensitivity. Recovering from a billing hiatus is difficult depending on how long it’s been since you last sent invoices. Sometimes recovery may consist of sending out invoices with updated due dates other times it may look like organizing invoices in order to take legal action for unpaid balances.
With long periods of billing issues, it’s important to consult with your accountant or bookkeeper – or invest in professional accounting and bookkeeping services to reconcile your books and manage your AR or Accounts Receivable.
As a business owner, it might seem like the most impactful aspect of a billing hiatus is the issue of cash flow – and you’re right to a certain extent. But, while cash flow is a huge issue, you’re overlooking the additional problems that a billing hiatus brings – such as altering client expectations and client experience. In a world where businesses can thrive or fail based on how their recurring clients, poor client experience can negatively affect your cash flow the same way a billing hiatus might.
The absolute best way to recover after a billing hiatus – or billing nightmare – is to ensure that it doesn’t happen again. Set up systems to ensure you’re invoicing your clients in a timely manner and that your expectations are clear along with meeting their expectations with maintaining professionalism.
If you’re business is growing rapidly and you need a professional to handle your billing – or assist with dealing with your billing nightmare – contact us at ModVentures today.