Posts Tagged ‘freeagent’

A few months ago I talked about the different emails I use for chasing late payers.   Judging by the interest this post received, it seems that late payers are becoming more and more of a problem for freelancers and small business owners.

As regular readers will know, I am an advocate of using cloud based accounting software – and my choice for this type of service is FreeAgent.

As I received so much interest in the late payment email templates, and a few questions on how I set up automatic chasing of late payers, I thought I would today share how I set up Freeagent to do the escalation for me.

I am sure that many, if not all, of the other accounts systems out there have similar late payment escalation systems in place – so this will be just as relevant.

Setting up Late Payment Chase Escalation in FreeAgent
One of the things I love about freeagent is that in many aspects of the accounting process, you can set something up and forget about it.  This is equally true for chasing late payers as it is for setting up standing orders or salary payments.   In terms of setting up late payment chase emails, it’s just a matter of setting up the email templates, and letting FreeAgent get on with it.

Within the Freeagent system, under the main settings menu (at the top of the screen), there is an option of Invoices and Estimates, and under this, an option for Invoice Emails.   This option allows the definition of all kinds of email templates – initial invoice cover email, thank you (for payment) email, and of course late payment chasing emails.

When I initially started using FreeAgent, I just set up a single email reminder template which sent a chase email 3 days after the invoice was due, and then sent the same email every 3 days until payment was made.   This worked for a while, but if you got the same email over and over, would it persuade you to make payment?  So I made it more sophisticated and gained better results.

Using the template emails defined in my late payers rules, I set up 9 different late payment rules – 2 emails for each stage (in case the first one was missed).  For each stage of the chase process, I created a new chase email, and set the Reminder Rules for the days after payment is due to send the email.    I have found that sending an email every 3 or 4 days seems to work best.

For each stage, the subject of the email changes to reflect what is about to happen – a warning, about to raise charges, on stop, debt recovery etc.  The text of the email also changes as per my late payers email templates already discussed.

Note quite automatic
Now whilst this does all the late payment chasing for me, its note quite fully automatic.   I do have to raise late payment invoices (with charges and interest) now and again – and even if FreeAgent was able to do this, I would still prefer to do this by hand (using the FreeAgent invoice creation screen) just to remain in control.

To allow me to keep track of what I need to do next (raise a late payment charge, put them on stop or pass them to a debt recovery company), the 2nd email of each stage in the sequence is marked to be copied back to me.   That way, when the email arrives in my in tray, it acts as a trigger and reminder for my next action.

My sequence and dates of my chase emails in FreeAgent are then as follows:

Timesheets – urrgghghg – the very thought can make the hardiest contractor, freelancer or small business owner shudder with the thought of over complicated administration.  I mean, timesheets – what is the point?  Really?  Your working hard, your making money, you can see your business bank account growing (or at least not declining), so who needs them right?  Well, maybe you do – or something very like them!

Let me ask you this – the last project you did – be it bespoke for a customer, freelance or on a contract – did it make you money?  Was it profitable?  If so, how much?!?  If you don’t know the answer to those three questions, how do you know if next time you quote for work, you need to up your day rate, increase your estimated time, maybe reduce it to make you more competitive, or if you were on the money?

Over the last 3 or 4 months, I have been recording time on projects.   I have not been over precise in time recording, but generally when I start work on a project I start a clock, and when I am done I stop the clock – it’s as simple as that.  When I was interrupted by a call or an urgent email or went for a cup of tea, the clock just kept running.  But if I stopped work on one project and started on another (for a change of scene) I did change the clocks on my projects.

I did this exercise as I wanted to really see how bad (or good) my estimation skills were on a couple of projects, and to be honest, they are not that far out.  However, I noted that I was quoting a little light on the real time taken to complete projects, so I have now made a mental note to increase all future quotes by around 3% of effort (rounded up to the nearest half day).

Now time recording does not have to be a major chore – there are plenty of free applications available for the web (if you use Freeagent for accounts, BaseCamp or ProjectTeamPM, they all have online time tracking and reporting), Windows or Mac desktop widgets or even better (in terms of recording time when you are not at your desk) on mobile devices such as Android or iPhone.

It doesn’t even have to be a full time commitment – its useful to do detailed time recording for a week (record time on calls, emails, surfing, eating, commuting, etc) to see where your time is being eaten up, and then try some outline time recording on some projects (as I did and described above) for 1 or 2 projects – just to see how good your quotations really are.  Of course, if you have contracts or freelance gigs which are billed on a daily or hourly rate regardless on the amount of time you spend, then I am sure you are already tracking your time correctly… aren’t you?!?

As regular readers of this blog will know, I am massive fan of business automation.  Any tool, technique or process that I can use which makes doing business easier makes me happy – the more automated my processes, the less time I spend on them and the more time I have for doing productive (chargeable) work.

One of the newest tools I have found is called Watchy (or Watchyapp if you use the twitter tag).  Watchy is another Freeagent bolt-on web based application, and deals with timesheet reporting.    Whilst Freeagent itself allows the recording of time spent on projects (and subsequent billing to customers for the time and associated expenses), it does not provide any form of customer portal to view the timesheets.  That’s where Watchy comes in.

Once connected to the Freeagent system, Watchy will connect to your Freeagent account on a regular basis and will pull in timesheet and invoice details and then organise the information into project views.  You can then create customer accounts so that customers can login to their own dashboard to view invoices, expenses and time spent on their project.

Watchy is still in beta development, so there is currently restricted access to beta testers, but full public access is scheduled for the next few weeks.  They are also busy making amendments, changes and improvements, so I am sure this will develop to become the perfect customer time and billing portal as the product evolves and matures.  I hope this will include timesheet authorisation and different reporting views.

If you are a freeagent user (recommended), then I also recommend Watchy to free up your customer information flow.

Whenever I read any business book, one of the things that will always be mentioned (normally in bold, underlined and sometimes with its own chapter) is that cashflow is the life and death of any business.  It doesn’t matter if you are a contractor, a freelancer, a small business owner or a multi-national, if you don’t have a revenue stream from happy customers ready to pay their invoices, sooner or later your bank balance will dwindle away and your business will fail.

So it’s critical that you know in advance when your business bank account is looking good, and when it needs attention – either in the form of a reduction in costs, or raising of more invoices.

I am a great fan of the FreeAgent accounts, invoicing and payroll system – it does almost everything I need to deal with business money matters quickly and easily from quotes, to invoices, to payments through to taxes – both company and personal.  However, it does not do cashflow forecasting (Freeagent prefers to concentrate on getting the accounting right).   So it’s good to see that an independent company has created a separate, but integrated web application called Float which deals with the missing cash flow forecasts.

Float links with Freeagent accounts and pulls in the account transactions, scheduled bills and invoices generated.  Once in Float, transactions can be set to one-offs or reoccurring (monthly, quarterly, yearly, etc).  Float pulls in both income and expenditure transactions, and can match new transactions against the scheduled events.  Using the current state of the Freeagent accounts, and the predefined reoccurring or scheduled transactions, Float will then produce some nice cash flow forecast models via charts, monthly tables and yearly projections – perfect for spotting time periods which need attention or which period of time is best to make that large asset purchase.

Float is currently in beta test mode, with development still ongoing, but they are accepting testers and beta users.   If you are a Freeagent user (and I will always recommend it to any small business), Float looks like it is going to be the perfect cashflow control and analysis tool to bolt on to the accounts service.

In business (including small business), there are a few basic principles.  Firstly, ways of making money; there are only a few ways of making money:

• Provide a service for which there is a demand from people who cannot or will not perform that service themselves (a service industry)
• Purchase items or services at a low value, and sell them at higher value (trading or dealing)
• Locate natural resources, extract the resources and resell (mining and exploration)
• Take individual items and resources, combine these into new items with more value than the component parts (manufacturing)
• Provide goods or services for a value, take the money, but never deliver (illegal)

Any and all business falls into one or more of the above.  As a freelancer or contractor, we normally fall into the service area.  Although for authors and software designers, if could be argued that this is really manufacturing (the resources are our time and effort).

The 2^nd and less obvious but equally important business principle is the monitoring of the 1^st principle.   Heads of corporations never really run businesses, they spend all of their time monitoring (and fighting) with the 1^st principle.  That’s all they do, day in, and day out.  As contractors and freelancers, we don’t have to spend so long on the monitoring aspect, but we still need to have the methods of monitoring.

For manufacturers, heads of industry, managers of multi nationals and Managing Directors of listed companies up and down the country, they spend their day controlling the numbers and monitoring the first principle.  The numbers they monitor may be the share price, the company value, the bank balance, the order book, the turnover, the cost of parts, the resale value, discounts and profit.  All will have their metrics they watch day by day, hour by hour.  These metrics are the company Key Performance Indicators.   Where an indicator goes red (or however it is displayed to them), they change supplier, negotiate discounts, raise prices, hire or fire.

As small business owners, we also need our measures, metrics and Key Performance indicators.  Whilst they won’t be as grand as a share price, they need to be monitored, controlled and tweaked as required.   Typical measures and KPI’s for a small business will include:

• Company Bank Balance – is it growing, shrinking, staying the same
• Invoices generated
• Outstanding Payments
• Cash Flow
• Spending (a credit card is useful for this) – is it getting out of hand
• Likely sales in the future (sales pipeline)
• Yearly/Quarterly/Monthly Profit and Loss (are we spending too much, generating too little)
• Stock on hand (if we deal in any type of physical items)

All of these indicators tell us a story about our small business.  By monitoring these on a regular basis, it tells us if we need to cut down on our spending, look for new customers, raise our day rate, look for expenses to reduce (such as changing for a cheaper supplier) or chase outstanding payments.

Of course, depending on your systems for tracking your bank balance, invoices, payments, receipts, cash and P&L, this can take 5 minutes, or it can take a lot longer.  Systems such as FreeAgent help contractors and freelancers do all of this monitoring as part of their everyday processes.  BUT, regardless of the system you use, monitoring of your business is a critical business process.

Note, if you are looking for a Freeagent referral code to save 10% on the freeagent sign-on costs, there is a code at the end of this post.

When it comes to web sites, products and services, there are many different ways of driving traffic and customers to your doorstep, be it virtual or real.  The vast majority will take time, money and an awful lot of effort with differing degrees of success.   As a business supplier, one of the cheapest methods is the referral – customers telling other customers to use your product and service because of how good it is.

There are 3 different ways of getting referrals:

Customer direct referrals – This is where customer A tells customer B how good your product/service is, you have no involvement, and the first you know about it is an email, phone call or visit from customer B.  Great – more business, but how many times has it happened for you?

Customer requested referrals – For this, you need to go cap in hand to customer A (possibly at the end of  a project) and ask if they know of any other companies who could benefit from the same product or service.  If they provide details (and even if they call company B on your behalf) you are only one step ahead of a cold call.

Customer incentive referrals – This type of referral is almost the same as the customer direct referral, with the exception that there is an incentive for customer A to contact customer B.

Let’s take two real world examples of these referrals.

LoveFilm – If you are a member of lovefilm, the online film rental company, as well as sending you your requested DVD or BluRay movies,  every so often you will get cards from them giving new customers a months free subscription for you to pass on to friends to encourage them to join.  This is all fine and good, but the big question is – what do I as an existing customer get out of it?  The answer is nothing.

FreeAgent – Now if you are a user and subscriber of the Freeagent small business online accounting solution, you have a page on your accounts screen for referrals.  Freeagent encourages you to pass on the good word – if somebody takes your advice and signs up to Freeagent, then they as a new user get a 10% discount.  But the difference here is that Freeagent also gives you, the existing customer the same 10% discount.

So in the two examples above, Lovefilm gives me nothing for proving their link above, whereas Freeagent gives me 10% off all my fees in the future if somebody clicks it and signs up.  But it also gives you the same 10% if you sign up.  In the Freeagent system – everybody wins.  My link gives me 10% off my existing account, you get 10% off and freeagent gets a new customer with zero marketing cost.   Everybody wins.

It’s viral marketing at its very best, but in this case you are not forced to watch a video of a computer generated frog, a man painted orange slapping people, or a dog roller-skating.

So that leaves two questions….

1)      Where in your business can you use the Freeagent model to have existing customers pass on your details for a future reward in the form of discount, gift, free days, hours, etc?

2)      If I wasn’t getting the 10% discount from the Freeagent link, would I still recommend it?  The answer is a big YES, even without the 10% referral, it’s the best thing for small business since sliced bread

The referral code is included in the above links.  But if you are looking for direct entry of a Freeagent referal code, use 34o5sqzm

If I could recommend any one product to anybody running their own small company, above all others it would be FreeAgent.   Freeagent is a web based small business accounting package.   But its more than that – it’s an example of how all things should be done.

I first came across Freeagent about 8 months ago when I had a fall out with my small business accountant that I used to my companies accounts.  Without going into too much detail, let’s just say we had a disagreement on some aspects of how the accounts were being done, and I was becoming more and more unhappy at the rising costs of doing my accounts.

When I started looking around for alternative accountants, I was originally looking at another normal accountant and actually met with 2 or 3 to talk rates and work I needed them to do.   But a few people in the same industry as me started to direct me towards a number of online accounts packages including clearbooks and sage.  But the one that stood out for me was freeagent – and I was impressed from the start.

Freeagent provides everything a small company owner could ask for – estimates, invoices, purchasing, bill payments, automatic chasing of late payments, full accounts, payroll, taxes, vat calculations and year end calculations, plus full online book keeping.  But the best bit is, you don’t need to know anything about accounts to use it – its just works, straight out of the box.  If you need advice or tips (and it’s really not difficult – if I can understand it anybody can), there is a very good support group.

Freeagent does all the things my accountant did, for a fraction of the price. For me, the best bit is that it provides day-by-day view ability of my (small) company’s state of play, from profitability, to outstanding invoices, pending quotes, tax position etc.   With my accountant doing my accounts, I only got this picture at the end of every quarter or at the end of the year.

Some of the many features of FreeAgent includes:

* Quotation of Estimates and quotations (from scratch or using a price list)
* Project setup and time tracking
* Expenses (both tracking) and payment
* Converting quotes into invoices (or new invoices from scratch) , including project time and expenses
* Print the invoices, convert to PDF or automatically email them to the customer
* Chase late payments
* Bank account transaction tracking, including download from most banks
* Tax calculations as you go, including PAYE, corporation and VAT
* Automatic submission of VAT to revenue and customs
* Payroll processing and reporting, including PAYE and dividends
* Tracking of multiple accounts, including paypal
* Full accounting reports; balance sheet, P&L, payroll, expenses, transactions, etc

Maybe the best thing about FreeAgent is you dont need to spend a lot of time on it, or know anything about accounting – it steps you through and does everything for you.  It is so simple. Its saves me time, it has saved me lots and lots of money, it provides me a clear picture of the state of my company, and its online so other people can access the information at the same time.   It’s already as cheap as chips, but if you use this link, you get a further 10% of the fees.  Plus you get to try it free for 30 days, so you have nothing to loose and everything to gain.

If you run any sort of small business, take a look – you really won’t regret it!