You are in business to make money—and unfortunately there can be times when your services have been delivered to a customer, and you are faced with playing the “waiting game” over when your invoice is actually going to be paid.
Nothing threatens the existence of a business more that slow-to-pay customers. However, if you are a business owner who needs ongoing cash flow (and who isn’t?), it is possible to employ some easy-to-implement best practices in order to move your outstanding invoices to the top of the “to be paid” pile. Follow these four strategies and see your accounts receivable process become more efficient.
- Double check your invoices for accuracy. It’s true that there are very few business owners who are probably creating an invoice by hand anymore. However, don’t believe that your software or invoicing platform is all knowing either. Make sure items such as sales tax and delivery charges are itemized correctly, and if you work internationally, it is helpful to show currency conversions so a customer knows exactly what they are looking at.
- The more information the better. When itemizing your services on an invoice, more detail is always better. It’s worth offering a bit more in the detail department instead of simply writing “services” on an invoice along with the corresponding charge. If a customer ordered something specific, make sure the correct service title, amount of time spent on the project, exact deliverables, are all outlined. This will help a customer remember just what they are paying you for when they open their checkbook or pull out their credit card to make a payment.
- Clarify your terms. Having a Net 30 or Net 15 payment policy in place is fine, as long as both you and your customer understand and realize when the clock starts ticking. Outlining the due date on your invoices will help you eliminate the ambiguity that comes along with simply stating, “Invoices are due in 15 days” on the invoice. If a customer understands they have a due date to adhere to, they are more likely to pay within that timeframe. Additionally, it is helpful to also note if a penalty will be charged if the invoice is not paid by the stated due date.
- Show discounts clearly. Another way to induce a customer to pay more promptly is by offering a “prompt pay discount.” This is essentially an incentive to the customer if they decide to pay faster. Depending on what works best for your business, there are a variety of ways to implement this. However, statistics show that customers are more likely to participate in an offer if the amount of what they will be saving in dollars and cents is spelled out for them as opposed to simply offering a percentage off.
Of course, the BizXpert can certainly help you get paid faster and also ease the entire process, from start to finish, for you as a business owner. To learn more about how this app can save you time and put money in your pocket, visit BizXpert today.