As a security provider, cash flow challenges can arise without prior warning. Unpredictable income and expenses are common issues for security providers and proper budgeting is crucial to ensure that you’re able to sustain business operations.
Accounting automation offers a modernized solution that facilitates the organization of your finances with unprecedented accuracy, efficiency, and agility. By leveraging accounting automation, you achieve consistent cash flow to support the longevity and scalability of your company. In this blog post, we’ll walk through how you can use accounting automation technologies to drive financial success in your security business.
Top 3 Accounting Automation Practices That Will Save You Money
Payroll
The last place you want to have any errors is payroll. Manually processing payroll only makes mistakes more likely.
Accounting automation provides faster calculations with fewer errors. It also automatically creates reports that can filed as soon as they are due.
Accounts Payable
Accounts not being paid on time generate many risks. You fail to receive vital goods or services when they’re needed. Expensive late fees accumulate. You also risk falling out of favor with your most important vendors.
Automation not only alerts you when supplies need to be ordered and payments are due, but it also tracks invoices and more.
Purchasing
There are few tasks with as much paperwork as purchasing goods and services. The purchase order is just the beginning. There are often contracts and other forms that need to be completed, tracked and recorded, as well.
When your process requires multiple people to be involved, it slows the whole thing down. That lack of efficiency can and probably does cost you money.
This is exactly the type of multi-step task where accounting automation will benefit you most. Automation ensures every single step of the procurement process is documented and stored as it should be.
Automation also helps with your inventory control by allowing you to set trigger alerts. This helps ensure you have the stock you need when you need it.
Turbocharge Your Accounts Receivable with Accounting Automation
How do you get customers to pay their bills on time?
That question represents a common pain point for many businesses. Late payments are inconvenient, they disrupt cash flow, and they create inefficiencies within your business.
Automation can help with that.
Make It Easier for Your Customers to Pay You
It’s always a good idea to have a payment option on your website, if possible. Assuming your payment page is easy to navigate, that makes it far less difficult for customers to pay their bills.
But some customers will still forget. There are three ways automation can help.
1. Automatic Payments
Offer your customers the option of having their payments automated.
Automatic payments are often charged to a credit card or withdrawn directly from the customer’s bank account on the same day each month. This guarantees a predictable cash flow.
2. Automatic Billing
Customers like consistency. Recurring invoices should, ideally, be sent on the same date every month. This task is easy to automate.
Since you aren’t likely to get paid if you don’t invoice your customers, this is an important option.
3. Past Due Reminders
Sometimes customers need a little nudge. Automated past due reminders make it easy to follow up on late payments.
Reminders should include a link to your payment page. That makes it easy for customers to take action as soon as they get the reminder.
Recurring Monthly Revenue
You may have clients who work with you on an as-needed basis. This is convenient for your customers but makes it difficult to predict cash flow. It could be beneficial to convert these relationships to Recurring Monthly Revenue (RMR) accounts.
Typically, this is done by negotiating a monthly payment for a specific service package—often at a slight discount to make it appealing to the customer. Then your automated accounting system would generate invoices on a monthly basis, even if you haven’t done any work.
If you believe clients need encouragement to switch over to that type of arrangement, think about offering some type of incentive. Examples include discounts or value-added services.
Boost Your Bottom Line
The alarm industry has unique challenges. It’s important to use a management and billing system that was designed with those challenges in mind.
Accounting automation can make your security company’s operations run more smoothly. With all your information in one place, your accounting practices become much simpler.
All you need is the right financial management solution developed specifically for the security industry.
The resulting regular cash flow will make the rest of your accounting far more manageable.