I work with small business owners to help them get their accounts receivable under control.Â Very often, there is a stack of past due accounts receivable.Â I immediately question whatâ€™s happening.Â Generally, the answer is â€œI havenâ€™t had time to follow up with them.â€Â I immediately get to work on the follow up calls.
Most of the time (at least 80%), the customer responds â€œI never got that invoiceâ€.Â There are a couple of ways FreshBooks will stop that response or at least give you ammunition.Â First, when you use FreshBooks to email your invoices, your customer has to click a link to view it.Â On your admin panel, you can see who logged in and what invoices they viewed (this shows up on your dashboard, so you see it immediately upon logging in).Â You will know if your customer is lying to you.
The second feature that will curb the â€œnever got it excuseâ€ is my absolute favorite FreshBooks feature.Â It isnâ€™t good business practice to collect on accounts that arenâ€™t past due.Â Generally you wait 30 days or so (if youâ€™re monitoring your receivables closely, longer if youâ€™re not) and then finally contact your customer only to find out they havenâ€™t even started the processing.Â So you send the invoice again and then wait even longer to get the invoice through their system.
I donâ€™t have that problem anymore.Â Now, I have clients calling me before 30 days to make payment arrangements or tell me when the payment will be made.Â Iâ€™m often surprised to get those calls.Â Why does that happen?Â My invoice terms are due upon receipt, but I allow a 30 day grace period before finance charges begin.Â I have FreshBooks set up to send automated reminders at 15, 25, and 45 days past due.Â The first email is a simple reminder, the following emails get more formal.Â It is rare for an invoice to get to 45 days without the client contacting me and I havenâ€™t wasted one minute of my time harassing them.Â I do state in those emails that its an â€œautomatedâ€ notice, so they donâ€™t think Iâ€™m personally nagging.
If anyone gets to 45 days, I get personally involved.Â Since there are few that get to that point, I have seriously reduced the amount of time I have to spend on the collections side of cash management.Â Before FreshBooks, I never had time and didnâ€™t feel right asking about an invoice that was still in the grace period.Â An automated notice to make sure itâ€™s on their radar seems like a better way to go, at least to me.
On top of all that, my clients can login and view their account and history whenever they want without calling.Â The invoices look great too.Â My clients seem to like the system and no one is offended by the messages the system sends.
My one wish for FreshBooks that would make it the killer application?Â Full QuickBooks integration.Â FreshBooks is NOT a QuickBooks replacement.Â Itâ€™s an invoicing system, not an accounting system.Â Invoicing is only one piece of the process, and FreshBooks does it REALLY well.Â It doesnâ€™t, however, give you the rest of the accounting tools you need to manage your business for success.Â I hope someone introduces a way to automatically sync with QuickBooks soon.Â Until then, Iâ€™m stuck making monthly journal entries to update my QuickBooks file.