Consider this idea to modernize the accounting system of YOUR business...
Let's talk about NOT sending out customer statements any longer, and why you should embrace that idea sooner rather than later.
But wait you say - my customers won't pay if I don't send them a statement. I disagree!
Under the assumption that your business sends out invoices for each sale made on credit terms (i.e. net 30, etc.), the use of customer statements simply provides a way for your customers to stretch out their payments to you (if you don't send out invoices, more details below).
Let me explain...
A properly designed invoice will have the date of the sale on it AND it will also have the terms and/or due date clearly stated. Immediately upon receipt, your customer knows when the payment is due for that invoice based on these factors. They can take this information and schedule payment into their QuickBooks or other accounting software. It used to be an excuse from customers many years ago that "we can only pay off a statement", but that argument went away long ago with the ability to pay by invoice common in almost all accounting software.
If you send your customer a monthly statement IN ADDITION to an invoice, you have just given them a built-in reason to slow down their payment to you. A savvy accounts payable department will simply wait until they get the statement and then schedule the payment to you based on that date and NOT the invoice due date. I've seen this trick done to perfection over the years - they know you are sending a statement out and may not even make any follow-up calls until long after the statement goes out. Why not hold payment as long as possible? Think about it - what a great plan on their part (that is costing you!)
In addition, the statement mailing process adds to your hard costs of doing business. The paper, envelopes and postage costs are all coming directly out of your checkbook. Why throw this money away every month? Eliminate it and you'll easily save hundreds if not thousands each year. Not to mention, you can take the time you and your staff spend each month "getting the statements ready" and redeploy it to revenue generating activities, like calling on overdue invoices, etc.
You can transition your customers' mind-set on this issue by way of a simple letter - the new year would be a perfect time to do this. In the letter, politely let your customers know that you will no longer be sending out statements as of (insert date here) and that you ask they pay their invoices based on the terms/due date as presented. This way, they can't say "nobody ever told me" about the change in payment plans.
NOTE: If you do NOT send invoices, but use the monthly statement as the only sales document for your customers, I would say continue to use the statement approach. A perfect example is a landscaper that bills monthly for their services. A statement is the perfect solution in this case. However, sending two documents to get paid on the same sale is overkill.
FIND THIS TIP HELPFUL? This is just one nugget of knowledge that Scott Gregory, QuickBooks Expert can bring to your business. Contact Scott today and put a game plan in place to help your business boost your QuickBooks knowledge and your bottom line.
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