5 Reasons to Set Up Account Credit for your Small Business

By: Andrea Lotz Thursday March 19, 2015 comments


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Account credit is a great way for small businesses to charge for their services.  Whether you’re a massage therapist, the owner of an auto restoration shop, a music teacher, or a business coach, you can benefit from having your customers pay ahead of time.

Here are the top 5 ways your business can benefit:

1.  You’ll always get paid on time

Nothing is more stressful than having to make collection calls to your customers.  It puts a strain on your relationship, takes a lot of your company time, and you’re pretty powerless to make them pay.

Is it possible to have your customers pay in advance?  In more cases than you might think, the answer is yes.  Provided you set up adequate documentation, invoicing, and contracts, your customers are likely to be willing to pay you a retainer, which you can then clock into.

2.  Your cash flow is more predictable and steady

In service-based small businesses in particular, cash flow is one of the most important problems to solve.  Billing customers after a service has been provided often means that you don’t have a lot of control over when the cash comes in.  This could leave you high and dry in a critical moment.

With an account credit system, you don’t start work until the cash exists to fund it.  You have total control over when that money comes in, and how it’s distributed.  It makes planning your company finances much less uncertain, and much less stressful.

This is a great way for freelancers to level out the income spikes and dry spells that are so stressful for financial planning.  By clocking into a retainer instead of charging after the fact, you control when you get the money.  Just make sure to keep your time clocked in extremely transparent, to avoid losing trust with your clients.

3.  You limit the time drain of needy customers

Excellent customer service is what usually sets small businesses apart from their larger competitors, but it can be a huge time drain on a business’s limited resources.  Accommodating customers’ changing wishes can lead you down a rabbit hole of lost time and resources, which you must then charge them for.

But when the price you charge is substantially higher than what you originally quoted, many customers don’t understand how much time their last minute changes cost you.  Charging them in advance and working off that account credit makes it very clear when the money is gone, so you can address the problem right then.  You’re more likely to get the additional funds you need this way, because the project isn’t yet complete.

4.  Your time clocked into customers and projects is tracked automatically

I’ve stressed in this article the importance of transparency when you’re using account credit to charge your clients.  In our experience, customers are happy to pay in advance as long as they can clearly see where the money went.  This means you must be meticulous about recording the time you spent, the rate at which you drain from the retainer, and what you got done while you were working.

In AllProWebTools, our timecards allow you to clock into specific customers and projects.  When you clock out, you’re prompted to record detailed notes about what you completed during that time. This information can be made visible to your clients, to avoid any confusion.

5.  Your employees know how long to spend on projects

Most of this article has been directed at solo-preneurs and freelancers, but account credit can help you be a more effective project manager.  Your team can also clock into clients and projects and log their activities.  You can even bill at different rates for different types of work done by different employees.

Because the AllProWebTools timecard system is integrated with the tasking system, you can also set time limits on different projects and tasks for clients, so your employees know how much of the retainer they’re authorized to drain.  Once the account is out of credit, you can either set it up so the account can go negative (in which case you’ll have to bill the client for the excess) or you can require a manager’s override to continue clocking in.  This prevents employees from accidentally spending too much time clocked into a client’s account.


Using account credit can be a great way to even out cash flow in your small business, helping you to better plan your finances and workflow.

Do you use an account credit system to bill employees?  If not, does it sound like it could work for your business? Let us know in the comments!

Andrea Lotz

About the Author: Andrea Lotz

Andrea is the resident writer for AllProWebTools. She loves to write about just about anything, especially small businesses, sustainability, and whatever is new and upcoming on the horizon.  She lives in Fort Collins and spends her free time cycling, welding, cooking, and playing ukulele. 

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