As a small business, a regular and reliable cashflow is critical to your survival.
You can’t wait around for your customers and clients to pay at a time that suits them. Receiving your payments on time, consistently, allows you to run your business more efficiently, and in turn allow you to pay your vendors, suppliers, and employees on time.
Here are eight tips to help you get paid faster, and ensure a steady cashflow for your business.
Provide payment terms upfront
Having clearly defined payment terms from the get-go provides clarity around your payment requirements. Discussing these with your clients upfront, including your due dates and late payment policies, ensures everyone is on the same page, and knows what to expect.
Automate your invoicing
Besides saving you time creating your invoices manually, automating your invoicing takes the pressure off your accounts too. A good accounting platform can do this for you, allowing you to generate, send, and follow up on your invoices, all without you lifting a finger. You’ll get paid sooner, avoid manual errors, and never have your invoices slip through the cracks again.
Reduce your terms
If it’s taking too long to receive your invoice payments, why not reduce your terms? Instead of a standard 30-day payment, reducing the time to 21 days, 14 days, or even sooner, will see you speed up your cashflow.
Reward early payments
Offering an incentive on early payments, even if it’s a small one, can speed up your payment times. Offering something as simple as a 2% discount isn’t a huge loss for you, but for your clients, it’s one more way for their business to save money.
Charge interest on late payments
This one might seem harsh, but charging interest on late payments gives your clients a monetary incentive to pay on time.
Request upfront payments
You can also change your payment terms to require payment upfront, whether it’s a partial deposit or the entire amount in full. Alternatively, you can avoid invoicing altogether by using mobile debit or credit payment tools and software to have your clients and customers pay then and there.
Shut it down
This also might be seen as a strong tactic, but suspending service or supply on late payments guarantees that you won’t accumulate even greater losses. It’s also a strong encouragement to stop consistent late payments.
Stay on top of your accounts receivable
Closely monitoring your accounts receivable means you’ll always be on top of what’s going on. You’ll be able to see where customers aren’t paying, and act quickly to ensure they do pay on time. The right accounting software makes this even easier, and can provide you with tools and reports to help you track all your invoices accurately.
At the end of the day, ensuring prompt payment of your invoices comes down to communication. Set your payment terms up front. Make sure your customers and clients know what’s expected of them. And follow up promptly if things start to slip.
By implementing these tips, you’ll be able to take control over your cashflow, and ensure regular, reliable income for your business.
If you need advice and guidance on securing your business’ cashflow, contact Accura here.