Reel.com founder and serial entrepreneur, Stuart Skorman, and longtime business owner John Muller, who had a Hoboken street named after him for his longevity, have at least one thing in common: they are bound by the necessity of billing clients and customers and waiting for payment. Whether you’re on your fifth successful startup, or just beginning your journey, the process of invoicing and collecting payments can often prove as difficult as getting the work accomplished. Balancing the client relationship and the need for payment begins with understanding the nature and organization of accounts receivable.

Entrepreneur.com defines accounts receivable as, “the money due from all customers for merchandise or services delivered on credit.” Management of this amount, shown as an asset on your company’s balance sheet, can make or break your company. Methods for managing accounts receivable differ as widely as business types; however, processes should achieve three objectives:

• Create a daily record of sales and receipts
• Generate invoices and statements on a recurring basis
• Track current and overdue balances on customer accounts

Setting up your accounts receivable process should encompass these significant issues:

Credit policies: Establish a credit policy and stick to it. Define the conditions under which you will extend credit, how much credit you’ll give, and to whom. Choose your preferred methods of payment, how you will determine credit worthiness for new customers, requirements for deposits, and interest charges on late accounts.

Providing an online method of payment for your customers is only part of an effective billing process. A major online billing myth is the belief that individual payment gateways serve the same purpose as an integrated customer billing system. Online billing systems work as customer management tools. They provide a flexible suite of business intelligence and analytics tools alongside communication and marketing structures that assist financial management and plan development. In short, online billing systems help you keep your business profitable.

Are these additional myths keeping you from retaining more of your customers and revenues?

“Our company can’t afford an online billing system.”

Begin to scrutinize and compare the costs of printing, labor, technology, supplies and postage and you will quickly recognize the steep costs associated with managing billing internally. Managing your own invoicing is time-consuming and expensive; it generates real and opportunity costs. Careful data entry and tracking is critical in managing business cash flow, but that time is best spent focusing on operations. Small business owners and executives must spend their time perfecting products and services, not on billing and collections. Compound the loss of time with errors in the invoicing process and the result is even more time and money lost - financial and opportunity detriments potentially devastating to a company.

The savings realized in mailing costs, with the additional benefits of receiving payments on an accelerated schedule, faster processing of funds and staying technologically relevant makes the adoption of online billing not only affordable, but necessary.

“We can handle our online billing in-house.”

Minimizing billing as a basic company utility rather than a strategic opportunity to develop and retain your customer base is a mistake most businesses cannot afford to make. The bill presentment and payment process plays a major role in efficacy, cash management and profitability. Technological and systematic best practices in the billing industry change often.