If you’re a small business owner, then you already know that maximizing your cash flow is absolutely imperative to the success of your business. That’s why ensuring that you’re invoicing properly is so important. Of course if you’re not running a large corporation staffed with a team of accountants, you could probably use a little invoicing help. Below are some invoicing tips to help you get paid more quickly so you can get on with conquering the business world.
Set Expectations – Want to increase the likelihood of receiving prompt payment? Let your customers know at the outset when you’ll expect payment by providing them with a written quote beforehand. That way you’ll be on the same page and they won’t be blindsided when you come looking for your money.
Automate Your Invoices – Using accounting software like QuickBooks to automate your invoices makes your business look more professional and helps reduce mistakes. More importantly it saves you considerable time and money.
Allow for Online Payment – Customers tend to pay their invoices more quickly when they have the option to pay online versus just with a check. There are plenty of online invoicing software programs out there for you to choose from.
Ask for Payment Sooner – While the industry standard for invoice payment may be 30 days, the average debtor tends to pay later than that. Want to ensure you receive payment within a month? Set payment terms for a shorter period of time like 2 or 3 weeks.
Get Paid Up Front – Depending what business you’re in, it might make sense to ask for a portion of the payment upfront. Then, as soon as the transaction has been completed, you can immediately submit an invoice for the remainder.
Add Late-Payment Fees – Want to encourage customers to pay on time or better still, pay early? Consider adding late-payment fees that kick in after a certain time frame. Conversely, you can incentivize your customers to pay early by offering discounts for prompt payment. Just make sure you’ve outlined your payment terms in writing prior to invoicing to avoid disagreements down the road.
Pick Up the Phone – Have an overdue account? Sending an email is fine but getting the customer on the phone is often more effective. Try to nip the situation in the bud by calling on accounts overdue by just a couple days. Then, keep calling (within reason) until you achieve resolution.
Accept Mobile Payments – Want to get paid immediately? Your best bet is to expand the payment options you offer. Consider accepting credit and debit card payments on the spot on your smartphone or tablet with a mobile payment solution like PayAnywhere.