As a small business owner looking to outsource your accounting, you might be familiar with the concept that your business will thrive if you outsource everything you possibly can and focus on growing and improving your business.
At CSI Accounting & Payroll, we’ve prided ourselves on being a one-stop shop for small business finances for over 50 years. However, there are still some commonly-requested services that we don’t offer for good reasons - including handling small business invoicing and bill pay (A/R and A/P).
Invoicing and bill pay are not commonly offered by accounting services, but in this article, we’re going to cover:
- Why can’t my accountant handle accounts receivable and accounts payable?
- What are my options for managing my bill pay?
- What are my options for managing my invoicing?
Why Can't My Accountant Manage A/R and A/P?
When you work with any type of outsourced service, there has to be some level of standardization. With no defined limitations, it’s nearly impossible for a service to be efficient - and with a lack of efficiency, associated costs will rack up and get passed down to consumers.
On the other hand, if you work with a service that has clearly defined service offerings, you’ll have peace of mind that your work is going to be done as efficiently and affordably as possible.
Bill pay itself can’t be standardized and requires a lot of manpower. Invoicing also can’t be standardized across a large client base since every company wants it done differently - and collection is an extremely volatile process that can directly affect your ability to pay your bills and employees.
So, what do you do if your accounting service won’t handle these for you? The following section covers the alternatives.
How to Manage Your Bill Pay
When an accountant won’t manage your bill pay, you have a few other options: doing it by hand, using your accounting software, or using an outside service.
Regardless of the method you use, we recommend tackling bill pay weekly - and never less than monthly.
DIY By Hand
This option is generally only available for small operations, such as sole proprietorships with few bills to pay. Almost as simple as paying your personal bills, this method consists of paying with checks (so you have an accounting paper trail) and then tossing out the paid bills! The cost? Free!
Use Your Accounting Software
This is another option that has no additional cost to you. If you work with an accounting service like CSI, the cost of your accounting software may even be covered!
Plus, with CSI, your accountant can show you how to enter and pay your bills within your Xero or QuickBooks Online accounting software. Best practices will be covered, and you can trust that all of your questions will be answered.
Use an Outside Service or Software
The final option that we can recommend is to use an outside service or software like Bill.com. This way, you gain time back by scheduling payments back into Xero or QuickBooks Online automatically.
This solution means you will have to pay the software’s fee, plus the fee for integration with your accounting software. If you work with a service like CSI, we’re able to integrate with a variety of software solutions, including Bill.com.
How to Manage Your Invoicing
Your billing frequency is going to vary depending on how your invoicing structure is set up. However, if you’re struggling to collect payments, you may be chasing down clients on a daily basis.
If you’re missing a payment, the standard practice is to start seeking payment after 30 days past the invoice creation date. Don’t ever let it pass 60 days with no payment, and do your best to not let any invoice roll over into the next year.
To avoid large collections, we now see a lot of businesses requiring a deposit upfront, then a final payment due after the service’s completion or product’s delivery. You may even set up your clients on an automatic credit card payment.
Use Your Accounting Software
This option has no additional cost to you if you work with an accounting service like CSI! Much like bill pay, we can show you the best practices on how to go through Xero or QuickBooks Online for invoicing.
Use an Outside Service or Software
Otherwise, you can use an outside service or software. We don’t recommend any specific software for this, but they generally have a collections aid built into the software. However, you’ll still have to chase down any missing client payments.
Get A/R and A/P Guidance From a Monthly Accounting Service
Managing small business finances can be challenging, especially when it comes to invoicing and bill pay. Many small business owners rely on outsourcing their accounting to save time, but many accounting services don’t offer A/R and A/P management due to the complexity of these tasks.
Now you’ve explored alternative options for managing invoicing and bill pay - including doing it by hand, using accounting software, or using an outside service or software. Regardless of the method, it’s essential to keep up to avoid collections issues and maintain good financial health.
If you think CSI Accounting & Payroll can still support your accounting and guide you in alternative options for A/R and A/P management, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about if you can do all of your own business accounting, or if a service may be a good value to you.
