by Chris Martin
The typical business owner is trying to juggle several plates in the air simultaneously. Between procuring new business, servicing current customers, and dealing with personnel and inventory, it’s not hard for a bill or two to be overlooked. Unfortunately, when bill payments get missed, those are the dropped plates that tend to make the loudest crash.
Here are some suggestions for business owners on how to prevent missed bill payments (and the messy aftermath that has to be cleaned up as a result):
- Have your bank pay bills electronically. Almost every online payment system allows you to arrange to have your bills paid automatically. The bank debits the money from your account and sends the payment to the proper place electronically. Online bill pay frees you up from having to remember payment deadlines — so you don’t have to think about it.
- Allow your payees to debit funds from your bank account. It works the same way as automatic bill pay; the only difference is that the payment arrangement is made through the entity to whom you pay money instead of your bank. Most utilities, property managers, and suppliers will gladly set up this type of bill payment plan with you.
- Keep a calendar. You can use computer software like Outlook or Google Calendar to record the due dates of your bills as they arrive. Then set these programs up to send an alert to your smartphone or computer a few days before these bills come due. If you’re old school, you can buy a paper calendar and use it specifically for bill deadlines — as long as you check it every day.
- Build a folder system. Buy a dozen or so folders and label each one with a different bill payee. Then place each bill or invoice into the corresponding folder when it comes in (you may have to print out electronic invoices). Check your folders once or twice a week to see if you have any bills that must be paid by the end of the week.
- Use a spreadsheet. If you’re a digital data-savvy individual, build a spreadsheet with a sheet for each payee. Then enter information including the payment deadline, the amount due, and the date you eventually pay the bill. There are also plenty of sophisticated software programs that will help you build and maintain a budget and track your expenses.
- Pay each bill as it comes in. The simplest solution to paying business bills on time is a pay-as-you-get-them approach. That way, no time elapses between bill receipt and payment, which minimizes the chances of a bill being forgotten or accidentally discarded.
In addition, here are some other bill-paying tips to help your business stay financially sound:
- Prioritize your bills. Taxes, payroll, and bills that are 60 days late or longer should be paid first, followed by rent/utilities, vendors/suppliers, personal debts, and insurance premiums. You can pay minimum balances on credit cards if you need some extra liquidity.
- Balance your checkbook and/or account books every month (or more often if needed). This will help you keep better track of your finances.
- If you are late on or do miss a bill payment, contact the payee and explain the situation. Don’t go heavy on the sob stories — just state your case and ask for a fee waiver or some flexibility. You may get “no” for an answer, but it never hurts to ask.
- Look into services like BillFloat. They help you buy a little time to pay your bills — especially if you know you will receive significant income in the near future.
Paying bills is one of the harsh realities of running a business. But it’s important that you pay your bills on time in order to maintain business flexibility, your credit score, and your business reputation.
Chris Martin is a freelance writer who writes about topics ranging from auto insurance to business finance to home improvement.