When you enter into business, your ultimate goal is to get paid. Without getting paid you won’t be able to complete or live up to your business obligations or pay your personal expenses.
So how do you get paid? Do you send a text message to your clients asking for payments, or do you ask them to cash app you the money (Big No No).
First let me just talk about the cash app very quickly as it relates to business. The personal cash app is not the proper tool to use to get paid for your business. Yes you get paid quickly….
However, it can be an accounting nightmare. The main reason is because just by habit, many business owners mix business and personal together when using the cash app (I know I have been a witness to this). This will be an accounting nightmare and your accountant probably will charge you extra to sort out this mess
If you have hundreds of transactions this will be a mess.
Please note , there is a cash app for business. If you are considering using that app, please use the cash app for business and not the personal cash app
Using invoices gives you indepth insight to how you are actually performing and how fast your clients are actually paying you. Once you start properly invoicing your clients you will really be able to see if you business is profitable or not.
It is so easy to think you are actually “making money” if money is constantly coming in and out.
**Remember tracking income is just one piece of the puzzle**
Tracking invoices is one of the more important pieces.
Tracking your expenses is the other piece….but I will jump to that in a later blog post
Using invoices also will give your business that added level of professionalism
A good system will be able to tell you how long an invoice has been outstanding . This is crucial because it allows you to see how long is taking a client to pay you and this can be a deal breaker when seeing if you would like to continue a business relationship with a particular client.
Some good tools to use to invoice your clients (just to name a few)
1) Please do not use informal forms of communication in order to collect from your clients (such as text messages or handwritten notes). You need a formal professional system
2) Invoicing provides an extra level of insight
3) Using invoices makes your life easier at tax time.
4) And using invoices will prove your income to banks and lenders