Receiving payments on time have a direct impact on the cash flow of your business. That is why it is vitally important you know how to keep track of client payments. If you are unorganized, your business will suffer because you may not be able to pay for expenses to run your business.
In this guide, we'll walk you through how to track customer payment data to ensure you have the correct information for your business.
Note: If you want to keep track of client data by using a cloud-based software, try Bonsai. You can create, send, track and manage all of these things in one place. Save yourself from the hassle of manually recording your invoices and try Bonsai 14-day for free today.
All tracking customer payments requires is good bookkeeping. If you have a proper bookkeeping system in place to track customer payments, then you may be safe.
There are plenty of options you can use to track business payments. You could do it manually with a Microsoft excel or self-employment ledger worksheet, to you could do it with online software. Just be sure all the invoice details are accurate. With a Google doc excel sheet, multiple users can be editing the information at the same time.
You'll want to keep track of things like:
Now, let's get into why many folks struggle to keep track of payments from customers.
When you break it down, tracking invoices and payments sounds easy. After all, you just need reconcile each incoming payment with a client and invoice number.
But tracking physical copies of invoices in the mail can lead to many complications.
There are many moving parts. like clients paying you late, sending invoices, recording invoices or payment details, and waiting for payments to clear the bank. There would be long lags between each stage of the process.
Sure, you'd be able to update and track how much 5 or 8 of your clients paid you.
Imagine updating payment data for 20-50 different clients. You'd quickly realize tracking invoices manually can get messy. Manually double-checking invoices and payments to make sure they match can take weeks or often months. Also, if customers don't cite their invoice reference number, it'd be a headache to match which invoice the payment belongs to.
Larger businesses will need a more organized bookkeeping system to avoid discrepancies in their customer's data.
Depending on your business, these unorganized payments can hurt how your operations function.
That's why keeping track of payments with software can help you make the process a lot easier.
There are many apps and software options out on the market, but ours has it all. Bonsai can help you streamline your entire cash flow recording with our software. Our cloud-based system allows you to keep track of your finances and avoid any manual mistakes. The invoicing program updates your ledger automatically every time you write a check or make an ACH payment.
Bonsai helps you make invoices, automate payment collection, send reminders, cut down the time needed to get paid and make the whole process easier. If you are sending and tracking payments manually, there's no way to find out if an invoice has been seen by a client.
You could be left in the dark waiting for a response, only to learn that they have not even seen the invoice.
Your data will be password protected to help prevent fraud and other wrong use of your information. Fraud and abuse is a potential danger of manually tracking your expense.
Our software will collect payment information like: date the payment was received, business name, order or invoice number, and if the customer is late. All of this can be quickly downloaded when tax season comes around.
Along with our invoice tracker, you'd be able to track time for work and manage expenses for taxes. Making the decision to switch to software like Bonsai could be the best decision for you and your team.
Claim your 14-day free trial here.
Our new freelancer bank account, Bonsai Cash, allows you to track all your client's payment in one ledger automatically. A business account is free to open with a Bonsai account. Not only will you be able to use templates and send invoices, but you'll also be able to use our software to store and manage your payments in one account.
Bonsai Cash also comes with an "envelopes" feature. You'll be able to open sub-accounts within your business bank account to better organize your finances. For example, you can create a tax savings account envelope. Every time you get paid, a percentage of the payment would be deposited into the account automatically. With Bonsai Cash, there are no hidden fees or monthly minimum balance requirements.
As a business owner, if your personal accounts are mingled with your work ones, you’re more exposed to risk. If anything happens in your business finances, it could impact your personal assets like your home.
Note: if you want to reap these benefits, try Bonsai Cash today. You'll get access to our invoice management tools, ready-to-edit templates and get access to our bank account. No hidden fees or monthly minimums involved. Open and use a new account today.