Three tips to help you get paid faster
Streamline the accounts receivables process with these three easy tips.
Cash flow is the lifeblood of any business, but late payments are an all too common obstacle to ensuring healthy cash flow. Besides impacting your business' profitability, chasing payments eats up valuable time that could be better spent on the more central aspects of running your business.
With the right tools and terms, you can streamline your invoicing process and help your business stay in the black.
1. Strategically choose a payment timeframe
While businesses typically set payment timeframes at 30 days, online payments and invoicing allow increasingly attractive alternative options. The right payment deadline for your business is ultimately your decision, but within a week of service is a good starting point. Depending on the nature of your work, you could even consider taking payment upfront or at the time of service. The sooner you get paid, the better.
2. Define payment terms and communicate them to the customer
In addition to timeframes, payment terms should cover accepted forms of payment, the currency you deal in (where necessary), and any late-payment penalties. On the flip side of late-payment penalties, you may consider rewarding customers who pay within a certain timeframe with a special discount or free item, which is a positive way to encourage speedy payment. Be sure to communicate these clearly defined payment terms to the client before starting any work to prevent confusion further along in the process.
3. Use cloud-based invoicing programs
Not only does a high-quality invoice help bring money into your business, it's a sign of professionalism and reliability – clients can easily be turned off by spelling errors or a poor design. Streamline the invoicing process by employing cloud-based invoicing programs, which can offer professional templates and enable you to send the invoice as soon as possible. These programs also make it quick and easy to send invoices and receive timely payments – in some cases, online invoicing can help you get paid up to 31 percent faster. You may also be able to use cloud invoicing tools to accept payments via credit or debit card and other online payment solutions from within the invoice. This feature, along with automatic invoice payment reminders, can significantly reduce instances of customers forgetting to pay.
When it comes to invoicing, a combination of the right processes and technology will not only save you time, but encourage your customers to pay promptly – giving your business the tools it needs to thrive.
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