Many small businesses spend too much time tracking down clients and customers that are past due on their payments. Often, the time and energy spent tracking down delinquent payments returns no value and is simply lost production time. Even if a client pays after their due date, the time spent getting that money is always time spent losing money.

However, businesses armed with a good accounting software package can solve this problem easily. How? It can automate your communication with your customers and track who has paid for their services and who has not, freeing up your time for revenue-producing tasks.

You can spend time reviewing accounting software reviews to identify a software package with the accounts receivable functionality to automate this process and stop wasting your time on it.

There are tools in most accounting and business software that aim to improve the communication between a business and its customers. These tools automatically update key accounting reports and send emails to customers when changes to projects, budgets, etc. are made. This reduces surprises at the end of the project as clients have a much clearer idea of what they can expect to pay throughout the project.

The first tool that you should look for is a quoting feature. This is particularly important for those in a contracting business.

Using quoting software ensures that you deliver the most accurate quotes that you can to your potential clients. Too often, a quote that is created by hand is too low and the company is forced to either earn a lower profit or deal with some very mad clients. Budgeting software will track time and costs in real time as they are incurred and will use historical data to generate the most accurate quotes, and will do so much quicker than one can do it with a paper and pencil.

As the project moves forward and is completed, the client is invoiced for the products or services received. Again, financial software can be beneficial here by automating this process.

The right financial software will automatically update the accounts receivable portion of your accounting system once an invoice is created in the software (since an invoice is a reflection of money owed).

While these features make the software worth it, the real benefit of accounting software comes in to play after an invoice is sent out. Most programs will then track payments received and can be programmed to send reminders to clients that have not paid – without requiring any tracking or input from users. Your software will keep track of whether or not clients have paid on time and will send them reminders until they pay. This significantly reduces the time that you have to spend investigating who has paid, who hasn’t, and when each payment is due. Once services are paid for, the reminders will automatically stop sending and the balance will be transferred from accounts receivable to revenues.

The end result is a software package that makes day to day operations much easier and less stressful for the everyday user. The software offers a much more effective and efficient manner for following up with and tracking down clients that owe money.

Most financial software will also track client payment history. This allows the business to easily see who normally pays on time and who does not, which can provide strategic guidance for the company as to which clients are worth doing further business with and which ones are not.

The common theme here is automation and improved efficiency. By spending less time worrying about who owes you money and tracking them down, you will be able to spend more time on value-added activities for your organization, resulting in a higher performing business overall.