![]() Alternatively, you could use a web application to present invoices and accept payments the way many utility companies do. This could be as simple as emailing your invoice as a PDF file which eliminates printing and postage costs. Another way technology can help is by sending invoices and accepting payment electronically. ![]() You may have an industry-specific application that can produce invoices and every small business accounting software package (QuickBooks, Peachtree, etc.) has this capability. First and foremost, you should use a business software system to create invoices – don’t generate them manually. ![]() You can potentially reduce administrative costs through technology. If you issue a lot of small invoices this cost could significantly erode your margin. A Fidesic Corporation study found that the cost of paper billing and processing checks received for payments was $8.44 per invoice for smaller companies – approximately 90% of this cost was labor. ADMINSTRATIVE COSTSĪdministrative costs include labor and direct expenses (such as paper and postage) associated with billing your customers, collecting past due invoices and processing payments. ![]() The costs of extending credit fall into three broad categories: administrative, financing and risk. In most cases you will want to continue selling to your customers on credit but you should understand what it costs you, take reasonable steps to reduce this expense, and consider some alternatives. Many small businesses extend credit to their customers as a matter of course without evaluating the cost and consequences of doing so. ![]()
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