Be Strategic About When You Pay Bills


How to be strategic when you pay bills

One of the biggest issues in anyone’s profitability is cash outflow. What is cash outflow? It is a fancy way of saying the money paid out by your organization.

When I ask most of our client’s bookkeepers pay their bills, they say:  “When we do our check run.”

I push them further to ask if they pay bills before or after the invoices are due; the answer:  “When we do our check run.”

So, I tell them to get rid of the “check run.”

Most bookkeepers don’t think about how their work affects the company’s financial operations – they simply do what they were taught in school and made sure the pennies matched. Our new rule is simple: all invoices will be automatically paid on the day they were due once they were approved. Management electronically approves invoices once a week.

Think about it. Do your client’s pay quickly?  We’re not suggesting you shirk your responsibilities. It’s just a timing issue. Slow down your cash outflow – be strategic about when you pay bills – and you will win the game.