Keeping the cash flowing into your business is obviously of the utmost importance. However, many business owners don’t have the proper practices in place when it comes to collecting the funds owed to them by their clients and customers. Successfully keeping the cash coming in extends far beyond simply sending out invoices. Let’s take a look at some top tips and practices every business owner should know when it comes to collecting payment:
- This one is simple- send those invoices out in a timely manner. The longer you delay, the longer you will be waiting for payment. Your business should have payment due date cycles in place and you need to stick with them. 30, 45, 60 and 90 days are common turnaround times. Work with your accountant to determine what type of schedule works best for your business and your customers.
- Speaking of your accountant, let them assist you in making the invoicing process easier on you. Together, you can establish an automated collections system. This system can generate the invoices for you. You or your accountant can then send them out. The system can also flag problem accounts and create financial reports.
- Now is the time to consider shifting to electronic invoicing or online payment portals. Many times customers pay their bills in a quicker fashion if they can quickly do so online. This is something your accountant can also help you put into place.
- If you allow larger clients or those struggling to go on a payment plan for their invoice(s), be sure to set clear parameters of when payments are due. Let the client know if any repercussions will take place in the event of a late payment. Also, make sure their payment schedule is set up within your accounting software so everything stays organized.
- Above all else, be upfront and clear with those you do business with. Let them know from the jump what your policies are regarding credit, pricing and payment terms. The more they understand from the start, the more willing they will be to pay their bills on time and without contention.
Are you ready to streamline your invoicing practices? We can help! Reach out to our team today to get started.