IT took allmediascotland.com far too long to settle on a system. And once done, it was a case of, ‘why didn’t we do that ages ago?’
We’re talking about the simple processes of sending out invoices, registering payments and settling bills.
It really couldn’t be neater. And the alternative is potentially a horrible pile of paper that bears little or no resemblance to incomings and outgoings in the bank statement.
It’s important that an invoice includes a reference number. That way, both parties in the transaction have a common point of reference.
There was a time when allmediascotland referenced its invoices with a combination of letters and numbers that sought to reflect the client’s name, eg FL1. That was okay, up to a point. Since invoices were always dated as well as referenced, there was enough information to hold a conversation.
But it became neater still to operate solely with numbers (as well as dates). 000001 followed by 000002, 000003, etc meant that, instantly, there was a sense of how busy the business was.
Whatever medium is used to issue an invoice, print or email, allmediascotland now always keeps a hard copy for itself, which it places in a folder (ordered by reference number) until such point as the invoice is paid.
Unpaid invoices remain in the folder until paid, meaning an easy way to spot overdue invoices.
When payment is made, the invoice is transferred from the ‘unpaid invoices’ folder into an ‘income’ folder.
Relevant additional information is written on the invoice, as and when: the pay-in stub number (if a cheque), when paid into the account (again, if a cheque) and then, finally, the date when the payment appears in the bank statement.
If the payee has provided some record of settling the invoice – such as a remittance advice – then a hard copy is stapled to the relevant invoice, providing additional confirmation that the transaction has been completed (ie invoice and remittance advice locked together).
Periodically, the income folder is ordered so that it is chronological, by bank statement entry (the statement of course including details of any pay-in stub numbers).
A final piece of advice: if emailing an invoice, ask – probably in the subject line – for the intended recipient to acknowledge safe arrival.
It’s not just good manners to settle a bill as soon as possible, it removes worrying about being overdue.
The practice of keeping a record of where at with bills is not dissimilar to the above. First, a paper copy of the bill is placed, in chronological order, into an ‘unpaid bills’ folder.
On paying the bill, the paper copy is transferred from the ‘unpaid bills’ folder into an ‘expenditure’ folder.
Again as and when, relevant information is written on to the bill, to assist in future referencing; for instance, if a cheque has been used to settle the bill, then the cheque number and the date on the cheque. And then when the payment has gone through, the date of the payment appearing in the bank statement (the statement of course including details of any cheque numbers).
Periodically, the expenditure folder is ordered so that it is chronological, by bank statement entry.
Please note, many till receipts fade over time, so unless you write – in ink – the key information on them (date, £, what for, etc), then you might at some point have nothing but a blank piece of paper.
In summary: Four folders are in operation: unpaid invoices, unpaid bills, income and expenditure. And, usually, each piece of paper in the income and expenditure folders has two dates: when it was first acted upon (eg cheque going into the bank) and when it then appears in the back statement (the latter of these dates being the one to ultimately order the income and expenditure folders).
Hope this helps.