5 Quick Tips for Faster Customer Payments
- Agree amounts upfront
- Invoice immediately
- Multiple payment options
- Send reminders
- Call in the debt collectors
According to ASIC, 40% of insolvencies are a direct result of inadequate cashflow.
Cashflow is the core of your business. Without cash your business will end up having to close the doors.
With these 5 Quick Tips, you’ll have your customers paying as soon as possible and you’ll stay in business.
- Agree amounts and payment dates in advance of starting any work for your customers. Put an engagement letter or quote acceptance process in place. That way there are no nasty surprise bills. Your customer can approve the invoice through their accounting system immediately and get it paid by due date.
- Invoice as soon as possible after the job is completed or in advance where possible. Better still, set up automatic recurring invoices in your accounting system if it is possible to invoice your customers this way. By doing this they get the invoices as soon as possible and their approval process can start immediately. Call us today if you are unsure how to prepare recurring, automatic invoices.
- Ensure the payment options are displayed clearly on the invoices and include as many payment methods as possible. Make it easy for your customers to pay and be sure to include an online link which enables customers to pay via a credit card from their mobile device if that makes it easier for them. If you are not sure how to do this call our office today and we can help you.
- Remind your customers a few days before the invoice is due and then again at periodic intervals after it is overdue. That way your customers know you are aware they have not paid and will not let it slip by. Some customers love the pre-reminder and it puts your invoice at the top of their mind. Your accounting system can automate this process.
- Once 2 or 3 reminders have gone out pick up the phone and talk politely but firmly to your customers. You are not in the business to fund their business and if they persist in not paying or paying late you need to consider if it is time to send them to a debt collector and if you wish to keep them on as clients.
If you follow these quick and easy to implement tips you will see your cashflow increase. Call our office today on 1300 015 130 to find out how we can help improve your financials. Know of anyone who would benefit from this? Feel free to share.
Specialising in Xero bookkeeping, Notch Above is a Brisbane bookkeeper and BAS Agent located in Alderley that offers Xero setup, as well as training and ongoing support. Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll services, debtor control and BAS returns.
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