As a small business owner the last thing on your mind is receiving payments from clients. Most entrepreneurs are heavily focused on the process of creating something valuable to change lives. Whether you’re solving problems or making dreams come true few entrepreneurs give much thought to the billing process.
Since boosting cash flow is a critical part of sustaining and growing your small business use these 5 tips to influence clients to pay quickly.
Put Invoicing at the Top of Your List
Send out invoices in a timely fashion to boost your cash flow. Generating cash through sales forms the lifeblood of your business model. If the cash dries up your small business won’t be far behind. Invoice at the completion of service rendered to expedite the billing process.
When work builds up and you feel scattered invoicing often becomes an afterthought until you run into financial problems. Bill after the job is done to boost your cash flow.
Go by the Numbers
By numbering invoices you set up an orderly, efficient way to track payments. Use a consistent numbering system to address any claims and to stay compliant if your small business is audited.
Using numbers to track invoices saves you time and energy. If you ever need to pull files you’ll have an effective system in place to find what you need.
Although you may feel cheated or outright agitated by a late-paying client it always helps to be nice. In some cases the client may be highly disorganized or perhaps going through temporary financial difficulties.
In other cases some customers may have totally forgotten to make payment in a timely fashion. Have compassion for any client going through a tough situation and be nice when asking for payment.
If you need to follow up a few times simply be pleasant but firm. You can make your point in a nice way and you’re far more likely to get paid if you’re polite versus being nasty and rude.
Using buzzwords like “please” and “thank you” can speed up payments significantly.
Use an online payment system to save yourself time and money. Creating checks is a less efficient, laborious way to facilitate the payment process. Give clients the ability to pay by credit card to streamline your system and to receive payments quickly.
Think about the billing process from the perspective of your client. Choose the most convenient, simple and quick method to make and receive payments to make both parties happy.
The number of customers who pay on time will increase when you make it easy for them to send payments.
Sending payment reminders in a timely fashion gives slow-paying customers a little nudge in the right direction. Most forgetful clients need a reminder to get the payment ball rolling. Don’t ever assume that the payer has or hasn’t received the initial invoice.
Take all guesswork out of the equation by sending payment reminders within a reasonable time frame. A simple, polite, properly worded follow up can speed up payments dramatically.
Download this professional estimate for free if you’re a small business owner who wants to speed up the billing process.