Skilled labor-based businesses like HVAC and plumbing generally earn high profit margins.
Customers willingly pay a lot for these businesses’ specialized skills and expertise. Behind the scenes, owners often find themselves racing against the clock from one job to the next, sometimes finishing up very close to Shabbos when emergencies arise (saving the day).
Blue Trader Books | 732-691-6740 | [email protected]
Despite the high earnings, many businesses struggle to maintain their cash flow to cover business expenses and personal livelihoods. Yes, they earned every cent they worked for, and there is a general upcharge for the materials used on the job.
But there are business owners who will not enjoy the fruits of their labor.
Why is this?
Because of the challenge of creating and sending invoices to customers, and even when you do that, there will always be customers who need a follow-up before they make a Zelle payment.
When you neglect this last essential step, you will have spent hundreds of dollars worth of materials and labor, which you might never recover until you start tracking and reaching out.
Blue Trader Books | 732-691-6740 | [email protected]
Billing, essential for payment, frequently falls behind due to several common reasons:
• Incomplete Cost Tallying: Owners may delay invoicing until all job costs are summed up.
• Time Constraints: The urgent demands of multiple jobs leave little time to create and send invoices right away,
• Lack of Follow-Up: Invoices may be sent but not followed up on, leading to open balances.
• Trust-Based Assumptions: Some owners rely on verbal agreements, assuming customers will pay without formal invoicing or reminders.
• Discrepancies in Accounts:* Confusion can arise over which invoices are outstanding or already paid.
When I take over businesses’ books, one of the first things I do is ensure that receivables are 100% accurate and current. Then, I devise a plan for invoicing and following up with customers who have an outstanding balance.
Blue Trader Books | 732-691-6740 | [email protected]
My job also ensures that we have tracked all the costs and overhead for each customer so we know the exact price when it is time to bill.
Outsourcing these tasks can be a game-changer for businesses that can’t afford in-house bookkeepers.
If you need help with these tasks, call me today at 732-691-6740 or email me at [email protected] for all your bookkeeping needs.
—
This article was authored by Yitzi Niasoff, the owner of Blue Trader Books. Residing in Manchester, NJ. Yitzi is readily available to discuss your bookkeeping requirements and offer tailored solutions.