Case Study: Cash Flow Process Turns Business Around
When an IT company offered a monthly maintenance package to its customers, it needed to send out about 50 invoices a month. The invoicing process became cumbersome, and the company fell behind. The situation continued for quite some time and went from bad to worse. Eventually, the company had a serious cash flow problem.
The IT company needed an affordable solution that would:
- Free up some of the time spent devoted to invoicing
- Accurately predict the amount of income they could expect each month
- Eliminate the need to chase after 20-30% of bills that went unpaid each month
To solve these challenges, First Steps Financial suggested QuickBooks Online, which allows for an automated invoicing system. The system automatically generates and sends recurring invoices and incorporates an automated clearing house
(ACH) transfer that automatically deposits payments in the IT company’s account. The system then automatically sends the client an updated invoice every month. Every new client is required to sign a contract agreeing to the ACH transfer.
The automated invoicing system:
- Eliminated at least three hours per week previously spent on invoicing. The company partners used this extra free time to focus on business development.
- Provided the partners with an exact amount of money they were guaranteed to bring in each month. With this information, they knew for certain they would be able to hire additional staff.
- Guaranteed that 100% of cash receivables would be paid on time. This eliminated the time it took to remind customers their payments were overdue.
The company has never had another cash flow issue. The automated invoicing system completely turned the company around.
Would automated invoicing be right for your business?
Creating a process for accounts receivable is the fastest way to eliminate a cash flow problem. To find out how First Steps Financial can help your business, call (609) 759-5881 or email [email protected].