Financial Skills – Writing Checks & Paying Bills

I was surprised when I asked parents to tell me the life skills they wish their kids knew, and there was a resounding request for a few topics:

How to open a bank account
How to budget & balance accounts
How to write checks and pay bills
And how to start saving for retirement

It seems some of the things we take for granted are, as a result, missing from what we teach kids.

In the last article, we focused on budgeting & balancing accounts. We even looked at games and contests you could set up for your kids. This article is the third article in the four-part series and will look at how to teach kids to write checks and pay bills.

Paying Bills

I was a bit surprised when several parents recently reported they had teens that were going to pay a bill by sending cash. I guess the obvious isn’t so obvious.

Paying bills is often done online, so it’s important to teach kids how to protect their identity online and store their login information where it can’t be stolen or accessed.

However, there are still quite a few companies that don’t offer online payments, and the only way to pay their bills is via check in the mail.

All kids should know why you NEVER send cash, and how to write a check specifically for paying a bill. For example: putting your account number and any other required details in the memo.

This brings us to the next topic: writing checks.

Writing Checks

When I was 12 years old, I went to outdoor ed. Oddly enough, part of the experience was that we could only write checks to buy goodies there, and our parents put a certain amount in our accounts so that we would also have to budget and balance our register.

Most of the kids were nervous! They weren’t sure how to fill out a check, and it was a great learning experience. I remember being nervous because we were required to fill out the amount in cursive, and I had trouble fitting it into the space.

These days, many kids never even think about writing checks because there are so many other means of transacting much more common; however, I’ve still found myself in need of checks for bills, paying contractors, and even helping me out of a pinch when I’ve forgotten my wallet.

Additionally, in my previous articles, I’ve expressed the dangers of using and relying on a debit card.

So how do you get your kids to learn how to write checks, and why would they care?

Getting Kids Involved

The best and most interactive way to teach kids to work a checkbook is to come up with a reason for them to write checks.

Here’s how it’s done:

Give your kids an old checkbook, play checkbook, or make your own (complete with a register). Then tell them in order to get certain things around the house, they’ll need to write checks. For example, to use their electronic device, there’s a rental fee that requires them to write you a check.

In addition, you can also give them a budget for the month to help them balance and budget their spending. You should balance a separate register so you can compare at the end of the month for accuracy.

Kids absolutely love this game.

Here are a few things you can charge for:

Using electronic devices
Watching TV (by the hour)
Special snacks or treats
Bicycle rental fee
Getting out of a chore (limited usage)

At the end of the month, if your kids keep a positive balance they get a prize. If you have more than one kid, whoever is the most accurate in balancing their register can also get a prize.

A variation is to cut off the privileges if they run out of money. Some think this is harsh, but it does mimic the real world.

Writing checks is simple, and most kids love to learn because they feel more like an adult in the process.

In the next article, we’ll discuss how to start saving for retirement. It could make the difference of over $200,000!

10 Rules for Composing Terms and Conditions for Your Invoices

Solid terms and conditions for your invoices are extremely important for your small business. If your invoices are complicated to understand or confusing to read, you may do some severe damage to your cash flow. Why? Mainly because if the client can’t understand your invoice they’re not going just pay. Your client wants to be sure that they’re being priced the proper amount of the goods or services that they requested.

1. Start thinking about all potential legal problems and scenarios.

The first thing that you must do before writing down your terms and conditions is to list all the probable legal obstacles or circumstances that could happen.

As an example:

What measures will you take if the client does not pay the invoice?
What will happen if you’re past due on delivering your services or products or service to the customer?
What will you do if the client is dissatisfied with your goods and services?
What will happen if the product or service is damaged when being provided by your client’s delivery service?
Are there any incentives if your customers pay beforehand?
What kind of rate of interest would you like to charge for late payments?
What if the customer is interested to renegotiate the contract just after the two parties agree to the terms and conditions?
Can your customer request a reimburse? If it does, what scenarios would allow for this?
What will happen if the scope of the work becomes wider?
If there was a misestimate on a budget or quote, who is going to pay for it?
Who is responsible if a product breaks after being bought?
What strategy will you undertake it the agreement or contract is terminated?

It might take a little time to think about and formulate this list, but as soon as you have got all of this written down you will be in a position to write future conditions and terms in a flash with the other clients that you will add to your client list. Most importantly, having the most appropriate terms and conditions for your firm will ensure that you are compensated and take care of your business if legal action is ever undertaken.

2. PROVIDE ALL CRUCIAL PARTS OF AN INVOICE.

Featuring the all-important elements of an invoice isn’t going to only speed-up the payment process, it will also answer whatever questions that the client has with regards to the goods or services that you provided for them.

When generating invoices, ensure that that you include:

Your logo
Invoice number
Your contact information
Your client’s contact information
The due date
The products or services you provided and their costs
The forms of payment that you accept
Early payment invoice discounts or enforce late fees

Before mailing out the invoice, ensure that all the information is right and that it’s being sent to the correct person. Any errors can easily slow-up the payment process and make you appear less professional.

3. CLEARLY EXPLAIN THE PRODUCTS/SERVICES BEING PROVIDED OR SCOPE OR THE PROJECT.

This is certainly the most relevant part of the terms and conditions on your invoice. Why? Because it describes what particularly the client is paying you for.

Like for example, if you are hired to make an internet-site for a client and it’s more than the client has imagined, having a description of the time and expenses it cost you to finish job answers any kind of questions or doubts relating to the final sum of the invoice.

4. SHORTEN YOUR PAYMENT TERMS

This should be {is kind of} obvious, but when you give customers a lot of time to make a payment, the longer it takes for you to get paid, which in turns leads to a slower cash flow.

So if you have a customer 45 days to pay an invoice, for instance, and that customer paid you a couple of weeks late, that means you’ve waited 2 whole months to receive a payment.

A payment term of 30 days or even less is the standard when it comes to invoicing simply because it’s helpful in keeping the cash flowing. Nevertheless, review your industry’s invoice standards and check with the client when their pay cycle runs. These factors can help you establish your payment terms.

5. HIGHLIGHT GUARANTEES AND WARRANTIES

It is not unusual for any business that is selling goods and services too often give guarantees and warranties. It makes them look more legit and reputable and gives the customer assurance. If you do provide a guarantee or warranty, make sure that is clearly outlined in your terms and conditions.

Never forget to address topics like situations where the client/customer loses their guarantee or warranty.

6. PURSUE LATE PAYMENTS.

Generally, there will be times when customers won’t pay invoices by the due date. Instead of being passive, you need to be persistent by tracking down those particular late payments.

Regularly keep track of your customers’ payment due dates and get in contact with them by telephone, e-mail, or mail if they have not paid you by the due date and feature late-fee terms on your invoices, like charging interest on over due payments – which a trusted cloud-based invoicing software will do for you automatically.

In case you can’t get a hold of the late-paying client, or they are not responsive to follow-ups, you may possibly have to send a collection letter, hire a collection agency, or take them to court. Make all of this information crystal clear from the beginning.

7. ONE SIZE DOES NOT FIT ALL.

Be sure that your terms are specifically created for your business. Remember, your business does not have the identical requirements, resources, and clients that other businesses have. Because of this you can’t really just copy and paste the terms and conditions from a commonly used template or another business considering that they probably won’t address your particular needs.

A template is really good for starting and directing you in the right directions, but ultimately you have to write terms and conditions that best match your business and clientele.

8. ALWAYS BE PROFESSIONAL AND POLITE.

Being polite can have a beneficial influence on your business. Simply adding a phrase such as kindly pay your invoice within twenty-one days” or “thank you for your business” can, in fact, increase the number of invoices getting paid by more than 5 percent! This may not sound like much, but this can result in thousands of us dollars per year right into your banking account.
Aside from assisting you get paid faster, being professional and polite can easily make improvements to your brand’s image.

9. MAKE THE TERMS AND CONDITIONS UNCOMPLICATED TO READ.

Keep the language in your conditions and terms simplified and intuitive. Put yourself in the shoes of your clients’ customers and realize that they’re not all familiar with industry terminology and even bookkeeping terms, like for example “net 30.”

Additionally, don’t aim to hide every single thing on just one page by using a small font so that your clients are not able to read the fine print. It will look tricky to your client and will ruin your reputation (regardless if there is nothing tricky on your invoice).

10. WHEN IN DOUBT, ASK FOR HELP.

When all else fails to perform as expected, or you wind up in a sophisticated or specialized situation, don’t hesitate to seek guidance from your mentor, fellow business managers, or your attorney. These are individuals that have experience in writing terms and conditions and are more acquainted with laws and regulations then you are.