Picture the scene. You go out and sell up a storm today – every customer you see loves your product and the orders fly in. Next week you deliver 1000 units to 20 clients, and they all promise to pay you in 30 days. You go out with your friends to celebrate the success of your business and everyone is envious of you.
Thirty days later you’ve continued your hot selling streak and deliveries are flying, but no money is coming in. You call your first client to ask for payment, and he says he hasn’t received an invoice from you. By now you’ve forgotten how many units you sold him, so you invoice him for 800 when in fact you delivered 1000. You get paid 30 days later and think all is good when in fact you’ve actually lost money on the deal. The same happens with the rest of your clients except that you bill them for 800 units when you actually delivered 500. They get upset with you, and you’ve lost valuable clients.
This may seem far fetched, but you wouldn’t believe how many times this (or something similar) happens each day in
. Believe me when I say that bad admin has ruined more businesses than you would believe. South Africa
When you deliver to a client, get him to sign a delivery note and make sure you have a copy. The delivery note should at the very least have the date, customer’s name, how many units you delivered, and the signature of the person who received the goods. Now when you invoice him you know exactly what you delivered and you have his signature should he ever dispute anything with you.
The opposite is also important. Check your supplier’s invoices to see that they reflect the right number of units and that you have been charged the agreed price. You don’t want to pay too much and waste your hard earned profit.
You might be busy, but don’t ever neglect your paperwork. Good admin is a vital part of any business, big or small.