Top tips to get paid faster- boost cashflow and pay your bills

Cash flow can be a make or break for small business. For every day you go unpaid you are costing your business money, money that could be used to pay rent, suppliers or your team, it’s money that could be earning you interest in your bank account. Cash flow is a huge stress for small business owners, leading to sleepless nights, irritability and fear for the future. The good news is there are some simple things you can do today to help you get paid faster.

1. Send quotes

Quotes mean your customers understand:

1. What they need to pay
2. What they get for the price
3. Your payment terms

By providing a detailed quote upfront customers can budget accurately and ensure they have the funds ready to pay you. It is also a good idea to ask your customer to sign the quote and return it to you. You can then keep a record of it in case non-payment does become an issue.

2. Provide multiple payment options

There are plenty of payment options on the market and different options appeal to different customer situations. Options include EFTPOS, PayPal, direct debit, Stripe and EFT. Offering customers two or more payment options can help them to chose a solution that suits them and enable them to pay immediately.

3. Invoice quickly

It is important to invoice customers quickly while you are at the front of their minds. It helps people to psychologically link the payment to the complete works, creating a sense of urgency in their mind.

4. Use an app to bill and remind customers

There are plenty of app solutions which allow you to invoice onsite, remind customers by email about their payments and simplify your invoice and payment systems. App options include MYOB, Xero, Quickbooks or ServiceM8, all offer a range of additional features to simplify your business and take you to the next level.

5. Make it easy (& cheap) for customers to pay

You invoice should make it easy for customers to pay. You should include all payment options in a clear and concise manner. It should show any additional charges for particular payment methods eg. Credit card fees.

6. Have a complete set of customer details

Having a complete set of customer details upfront including phone, address, email, business name and contact name is essential if a customer stops responding to you using a particular method. Be sure to spend the time upfront to save yourself lots of time and stress later.

7. Invest in your customer relationships

This is an easily overlooked aspect of getting paid quickly, investing in your customer relationship. To invest in your customer relationship you are opening communication channels and reminding customers of your value to them on a regular basis. Building relationships can be as simple as check in emails, phone calls or regular general updates and requesting feedback.

8. Make payment terms clear

It may seem simple but making your payment terms clear upfront can have a great impact payment speed. Have a friend or family member review your invoice email and invoice to ensure your terms are clear to them. Consider including your payment terms in bold or larger font or including a simple reminder in your invoice email to ensure customers are well  aware of when their invoice is due.

9. Automate sending payment reminders

This is a great way to save yourself time and worry! Many tools allow you to automate sending payment reminders. You can set your tool up to remind on the due date and weekly from then on. Consider what is reasonable for your customers and your business situation, for some daily reminders may be key to you getting paid.

10. Think about late payment penalties and early payment incentives

Late payment penalties and early payment incentives aren’t for everyone. You need to be sure you are providing a discount or penalty that is significant enough to encourage payment but not so significant that it will impact your profitability. Depending on the size of the invoice and your individual circumstances you may want to provide a discount of 10% on a bill of a few hundred dollars, for multi thousand dollar deals a discount of 0.5% might be more than enough. It is essential that you take into account your need for payment, the daily cost to your business of not being paid and your profit margin on an invoice when deciding on incentives and penalties. Your accountant or business coach can provide you with advice specific to your business and circumstances.

11. Include specific details when following up overdue accounts

When sending reminder emails it is important to include specific details of the overdue account including due date, what the invoice/ services were for, who signed off on the purchase and any promises of payment that may have been made. This will you’re your customer’s representatives to understand the need for prompt payment.

Don’t forget that you have earned the money and deserve to be paid on time. By implementing the solutions outlined above you can improve your business cash flow and reduce your time to payment, meaning money in your pocket sooner.

Need a hand with getting paid faster, budgeting or cash flow?

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Any advice in this blog is general in nature and is intended for information purposes only. For personalised advice please contact your accountant.