Despite the importance of cash to a business, many business owners neglect to implement the proper procedures for dealing with cash, and end up with cash flow problems. We'll also discuss a concern that is often neglected - making sure a business gets the most from its relationship with its bank. Although the focus here is on the sale of goods, many of the principles in this article can be applied to a service business. If you haven't yet invested in a fax machine, having customers fax orders speeds them up. Invoices should be mailed at the same time that goods are shipped.
Some businesses prepare invoices and packing slips at once, before shipping the order.
Then the order is shipped with the packing slip, and the billing department is told of the shipment, at which time the invoice is mailed. Sending invoices a week or two after the orders are filled will result in a wasteful delay. Although use of a computerized billing system fosters the use of large batches of invoices, stalling bills until you have a large batch will slow your cash flow. The cash flow improvement from billing in smaller batches can more than offset the convenience and economy of billing in large batches. If customers are late, call and write them.