You finally made the sale, but if you allow customers to pay in the future, your work isn’t done just yet. Since an invoice doesn’t pay your employees or purchase additional inventory, if you don’t manage accounts receivable, your business may get into a cash flow crunch.
There are a number of ways to speed up the process, but many hinge on the business invoicing properly and creating an effective cash flow system.
Here are seven tips to speed up your cash flow:
1. Issue business invoices as promptly as possible after the work is completed. If you take too long, your client may have forgotten about the bill or moved on to other business opportunities.
2. Make it easy for clients to pay by providing a range of payment options, such as online payments, credit cards, or checks.
3. Follow up with delinquent clients and take appropriate action, such as sending a bill reminder or turning over the account to a collections agency.
4. Keep Your Invoices Simple – When you create an invoice, make sure that all of the pertinent information is easy to find and understand. Clearly state the payment terms on the business invoice, such as the due date and any discounts for early payment.
5. Offer discounts. No one likes to pay more if they don’t have to and by offering a discount for early payment, many customers will pay early. This helps speed up business cash flow and ensures that you get paid faster.
6. When possible, use electronic methods to accept payment. Many business owners complain about slow payment, but they don’t offer the quickest and most convenient way for business customers to pay them: online payments. While accepting credit cards will cost you in merchant fees, it might be worth it to help get you your money sooner.
7. Consider not taking as much work to slow-paying customers. Be proactive about reviewing your books to see who pays on time and who pays late. Prioritize going business with those that have a good business reputation and can help you get paid quickly.
When you’re looking for ways to speed up business cash flow, it’s important to take a holistic view of your business practices and make changes where necessary. By following these seven tips, you’ll be on your way to getting paid sooner rather than later.