As much as I would love to tell you paying your bills and seeing money flow out of your business will be easy and painless, that isn't the case.  It's always difficult to see money flow anywhere but into your own pockets.  I'm on both sides of the bill paying issue.  I receive payments as well as issue them personally, for my business and for my clients.  There are a few items that will cut down on your frustration and make this task a bit easier.

Remitting Payment
When writing a check or using a money order to pay an invoice or bill (known in accounting circles as your accounts payable), enter a notation in the memo indicating what invoice you are paying.  Entering your customer number is also a very good idea.  Large payment processing centers use these numbers to credit your account.  Without the numbers your payment gets lost in the system. 
I have received several money orders that I cannot apply to an account because the customer name and any other identifying information is missing.  That means the customer will receive statements demanding payment.  You can see where this is headed.  The customer becomes upset because the bill has been paid yet I can't find it and apply it to the invoice.

Your Records
That leads me to your records.  Keep a copy of the invoice or bill in a file folder labeled with the appropriate month and year.  But before you file that copy, write down the date you paid it, the amount you paid and how you paid it including the check or money order number.  Now when the company says you haven't paid the bill you can retrieve the copy and say "yes, I did and this is when, how, etc."  By the way  this will ultimately help your bookkeeper, accountant or tax professional as well.

It's Not Mine
What happens when you receive a bill that you think is in wrong?  Do you pay it?  Do you stew about it?  If you have a bill that you think is incorrect call the company and speak with their Accounts Receivable department and ask for clarification.  In a calm manner describe your point of view.  If the company is very large such as Best Buy or AT&T it is easy to mix up accounts, charges and payments. 
Do not automatically pay the bill if you have an issue with it.  Once the company receives the money it is much more difficult to get it back.  That doesn't mean you can forget about paying the bill without an explanation to the company.  That will get you put into collections and cause issues with your credit.  Call and get the issue resolved.

Can't Pay the Bill
Everyone runs short of cash.  That's why there are cash flow reports and cash flow specialists.  Many companies opt to not pay a bill or two when they run short of cash.  Ignoring bills will, again, lead to issues with your credit.  The solution is to decide how much you can pay for each of your bills then call each company and let them know you are making partial payments.  Accounts Receivable departments will be more understanding and will work with you to get the bill paid in full.  The larger the amount due the more important this is.   As I have explained to my clients, it is better to receive $20 a month over a period of eight months to pay a $160 bill than to not receive anything.

When you make a commitment to a payment plan make sure you stick with it.  If you know you can't make the payments negotiate for lower monthly sums.  After all, you initiated the plan and they will expect you honor your word.  By the way  initiating a payment plan will not eliminate late fees and finance charges.  But it will eliminate some bad feelings and frustration. 

It may take a few minutes longer to process and pay your monthly bills but the result will be more positive and less frustrating. 

Quick Tip
Effective January 1, 2003, the standard mileage rate for the use of a car for business purposes is 36 cents a mile for all business miles driven, down from 36.5 cents in 2002. The standard mileage rate for medical and moving purposes is 12 cents a mile, down from 13 cents. The charitable rate, which is set by law, remains at 14 cents a mile.

If you have questions or need clarification on anything, please feel free to call (406-216-2224) or email us (suzette@flemmingbusinessservices.com).