I’ll be posting a series of these things and updating as the results come about.
SO, experiment 2 – changing my current deposit model.
My existing system was that invoices would be sent out, and then the clients would mail the checks to me, and then I’d collect them. Periodically (every 7-10 days) I’d scan the checks and a deposit slip to Valerie, my bookkeeper (an excellent one if you need one), and then I’d take them to the bank.
Advantages of the old system:
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I had a “feel” for how much money was coming in.
No service fees or added costs
Disadvantages:
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Deposits were dependant upon me getting there regularly.
Uneven cash flow as a result.
Takes time away from other things.
Waste of paper, stamps, and time.
Reminding clients to pay; waiting on payments.
So what I’m trying now is to get as many people as possible to allow us to do ACH (electronic check deposits), and the remainder will be mailed to a PO Box that Valerie will pick up regularly, and deposit. At the moment she’s taking the paper checks and electronically depositing them. We’re looking at switching banks (I really like to stay local, but…) so that either of us can deposit checks in person.
Advantages of the new system:
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Less work for me.
More even cash flow.
More timely receipt of payments (we make the electronic checks 10 days after invoicing – no need to wait for check)
Streamlined flow for clients, Valerie, and me.
No paper waste – no copies of invoices, checks, or stamps. Green!
Disadvantages:
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Cost – we do pay a fee for the privilege.
Potential client confusion. If they’re still sending paper checks, they won’t get them back (how many banks still do that?)
This is very much an experiment in progress, but so far, so good. It does feel weird tho, after so many years, not seeing so many checks in the mail (not everyone has gotten the address change going yet so I still get some).
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