If you’re still mailing custom invoices by hand when billing time comes around, your invoicing system is long overdue for an overhaul.
With tons of software choices to help you organize, manage, and automate your invoicing, the real trick is to find the right payment solutions to fit the way your particular business runs.
Unlike the old days of throwing a stamp on your letters and handing them off to the postal worker in hopes they find their way to their correct destinations, today’s software tools give you the ability to track your purchases from the very first estimate until it’s completely paid.
With so many other parts of you business you need to devote your attention to, invoicing is one task that needs to be automated as much as possible––especially for small business owners with a full plate of daily responsibilities to attend to.
With a better system in place, you’ll not only speed up the payment process in general, but also make a positive impression on customers who find an extra layer of convenience in your invoicing system.
Let’s run through four key ways you can improve your process:
1. Formulate a plan to deal with non-payments
For any small business owner who has ongoing retainer clients set up on a regular payment schedule, late payments are simply a fact of life.
In the worst case scenarios, your clients and partner companies simply may not pay you at all for various reasons.
If you find yourself regularly dealing with payments coming in considerably later than they should, you may be running some big risks for your business’ cash flow. In order to be confident you’ll be ready to pay your bills on time, it’s important for clients to be paying you at the right time.
Establish a timeline for sending out payment reminders. If these reminders fail, it’s time to get in touch with the client and ask them directly why they aren’t able to make regular payments when due dates roll around.
2. Make it as easy as possible for clients to pay you
The best way to avoid late payments from becoming a bigger problem is to make it as easy as possible for your clients to pay. Probably the most common reason for late payments isn’t as malicious as you think. When an invoice comes in, it can be difficult to make it a priority when you’re busy with other daily tasks that need to be dealt with––all of us have probably experienced this at some point or another.
Today with software payment tools, it’s possible to set up extremely fast and convenient one-click-to-pay systems, which don’t throw a wrench into your client’s work schedule.
In addition to this, try to be as open as possible when it comes to payment types. While credit cards and checks have been the standard for years now, more and more businesses are uploading their accounts and paying through systems like Paypal. With a little extra effort on your part, you might find faster turnaround times end up boosting your business by smoothening out your cash flow.
3. Be complete––especially when it comes to addressing late payments
One of the easiest ways to create payment delays is by sending off an incomplete invoice. If your documents aren’t sufficiently labeled with essential contact information such as mailing address, email, website, phone number and any other channels clients use to communicate with you, it’s easy to find yourself going back and forth to get more information.
Similarly, completeness can also mean coming through on fees for late payments if your clients can’t be convinced to pay on time through other means. If you do have a late payment policy in place, make sure clients are made well aware of it by adding it directly to the invoice itself so there can be no confusion when clients fail to pay.
If you’re a small business owner swamped by the weight of your finances and you’re interested in hiring an outsourced accountant, contact us. Our start-up accounting and CFO services experts can provide you with personal guidance.
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