- December 18, 2024
- Posted by: TheQBC
- Category: QuickBooks Desktop
Of course, you’ll need your customers’ cooperation. Here are some ways to encourage that.
One of your most challenging tasks as a business owner is getting your customers to pay their invoices. We’ve suggested ways you can encourage them to settle up in past columns, like:
- Sending statements,
- Making your invoices look as professional and attractive as possible,
- Sending invoices out right after the sale,
- Assessing finance charges, and,
- Accepting credit/debit cards and bank payments through QuickBooks Payments.
This month, we’re going to look at some other actions you can take to accelerate your receivables. We don’t necessarily expect that you’ll take all of them on, but even incorporating one or two of them may help bring those payments in faster.
Tip: There’s a quick and easy way to find out where you stand with customer payments: Look at your Payments Snapshot. Click Snapshots in the toolbar, then click the Payments tab. Look at the Invoice Payment Status chart (double-click in the Unpaid section to see the Open Invoices report). Look at the list of Customers Who Owe Money (shows due dates and amount due). Run the A/R Aging report if you want more detail. You can rearrange the data “blocks” on this page by grabbing a title bar and moving it to a different position.
QuickBooks’ Payment Snapshot gives you a quick look at which customers owe you money.
Start relationships off right with new customers.
When someone orders from you for the first time, don’t just send out the product or provide the service. Send a letter welcoming them as a new customer and explaining your shop policies. You might tell them, for example, when and how you send invoices (online? through U.S. Mail?) and how quickly you send them. Explain what your payment terms are (like On Receipt, 30 days, etc.). If you assess finance charges on late payments, spell these out in detail.
QuickBooks can be integrated with Microsoft Word to create these letters, so you can create a boilerplate document and just personalize it for each individual or company. It’s not difficult, but you need to understand the concept of mail merges. We can help you with this.
You might take a little extra care packaging their first shipment. Every personal touch you can provide will affect your customers’ impression of you as a company and may make them more responsive to invoices.
Send reminders to past-due customers.
You don’t have to wait long to remind customers that they missed paying a bill. Some companies actually send reminders a little before the due date.
We’ve written columns about customer reminders before. They’re a little complicated in QuickBooks. You have to create and manage Customer Groups, and then establish schedules. The advantage is that they automatically go out. But getting started can be a challenge. Let us know if you want us to walk you through this process.
Offer a discount.
You might offer a discount to loyal customers, for example. We’ve never explained this process in QuickBooks, so here’s how it works. First, you’ll need to create an Item for your discount. Go to Lists | Item List. Open the Item menu in the lower left and click New. Open the drop-down menu under Type and select Discount. Give it a name and description and enter the Amount or %. You must enter a percentage sign if you want the discount to be calculated as one. Otherwise, QuickBooks will just subtract the amount from the subtotal or total.
You will need to create a new discount Item when you want to create a special discount for customers.
If you want the discount applied before sales tax is added, make sure that Tax is showing in the Tax Code window. Otherwise, click the down arrow and select Non. Now QuickBooks needs you to assign your new discount item to an Account, which may not yet be set up in your software. If you’ve worked with your Chart of Accounts before , you might be able to try this on your own. Go to Company | Chart of Accounts and open the Account menu in the lower left. Click New. Open the Other Account type dropdown menu and select Other Income, then Continue.
Enter an Account Name and Description (if you plan to set up multiple discounts, be sure that it’s unique and recognizable). Check the box in front of Subaccount of and select Other Income. Don’t worry about the Tax Line Mapping or the Number. When you’re done, Save the account. You can now use it in sales transactions. If you haven’t modified the Chart of Accounts before, we suggest you schedule a session with us to walk through it and get your discounts set up. We can also show you how to create a subtotal option so you can add a discount to several items at once.
Ask for an upfront deposit from some customers.
You may want to do this in two situations:
- Your customer wants to make a very large purchase, or,
- You have a customer who has been delinquent in payments in the past but who wants to order again.
QuickBooks can do this, but it’s complicated. You have to create two things before you can accept deposits (or retainers): a liability account in the Chart of Accounts and a deposit Item that’s linked to it. You should set up a session with us if you want to do it.
Start 2025 Right
How are you doing with QuickBooks and with your accounting work overall? Do you still have tasks left over from 2024? Before you start adding new records and transactions, we recommend that you catch up with your overdue chores first. If you’re having trouble keeping up, let us know. We may be able to help you by making some suggestions for using the software more effectively.