Do you know what money is? Money is a good of an exchange, simple no? Is the inflow when people buy and pay your products or services; is external attention converted into income,energy that keeps the production line running. Also, if we have a business, we must be responsible for our debts, another important flow to keep the business in good shape. However, if you are an independent professional or small business owner, you can only honor your debts, if you are in control of accounts receivable, the money that others owe you.
It does not count if you are a freelancer or you own a small business, you must record all freelancing or small business income. A sale is not a sale until the money is in.
If you take in cash payments, you require recording the transaction when the money is received.
However, typically, you create an invoice before you receive payment from the client. This is the system when you record an account receivable. Because the biggest problem is tracking the invoices and its payments, we recommend setting up standard procedures for receivables. If you maintain the appropriate information about these accounts, once an invoice or payment is overdue, you can act quickly.
You MUST include this information in your invoices.
- Your Name (Freelancer) or Business name and the address.
- The Customer’s name, shipping and billing address and contact
- Give an invoice reference / number that will relate to this transaction only.
- A date for the invoice
- The items, products or services provided, the amount and quantity
- Taxes (If applied)
- The total invoice amount.
- Payment terms of the invoice (we love cash).
You must not deliver your products or services if you do not receive the flow of energy, which only comes from the money collected. You have not invented the money; It is just creating the entry way to get to you to make a viable business.
If you want to do by yourself, you can use cloud software to keep your records and /or accepting online payments. Once you learn how to use it, the software will help you track receivables, including how many invoices do you have, how many have been paid, and how much remains pending. We suggest, at the beginning, have a professional advice to guide you with these standard procedures; at the end, you only will use the necessary effort to keep updated your finances.