Receiving money is the greatest pleasure when it comes to business. So, why not learn a few tricks that can help you get paid faster.
When you start a business, one of your first responsibilities should be to decide how you will collect money from customers and in which way you would like to pay to your wholesalers. Also, the process of receiving money depends on your business as well. Some small businesses only accept cash but they can get problematic as one may not be able to always keep good business records.
If you don’t get paid at the time of the sale, you must bill customers including other businesses, which means you will need to find a way to make sure these bills get paid quicker.
The most important aspect to remember about billing and collecting from customers is that the longer the bill is due, the less likely it is that you will get your money. So you will need to set up a specific collections process and make sure you follow it with every customer.
When to bill/invoice a customer?
A turn out timing is important. But that’s not the only ingredient in getting paid on time. Send out your invoices as soon as possible. It’s even better to send out invoice even before the beginning of the job. Invoicing after a completed job leaves small service business owners vulnerable to receiving nothing for their efforts. After you finish a project, the incentive for customers to pay you decreases considerably.
Get Paid By your Customer and Clients Faster with these 6 easy steps
1- Don’t credit new customers
Small businesses, just like large businesses, need to have credit policies in place that provide rules for determining which customers or clients will be extended credit and on what terms. And if you are thinking of extending credit beyond a point to individual clients or customers, you should have a procedure set up where the customer or client has to fill out a credit application and/or do a customer credit check.
2- Take Partial Payments in advance
The uncertainty of where you are getting paid or not is rather frustrating so it is much better to ask for a partial deposit upfront before making a dispatch of your stock. This is now an increasingly common business practice that everyone is adopting now. And no reasonable customers will be offended by this. The benefit of partial payment is that it ensures that you get paid something even if the customer or client defaults on the rest of the bill.
3- Invoice Promptly
Customer/client invoices should be organized and offered immediately upon delivery of your goods or services to the customer or as soon as sensibly possible. Not doing so can make your business look unresponsive to getting paid and slow down your cash flow for no reason. Waiting to prepare your invoices at the end of the month, for example, you may be adding as many as thirty extra days to your cash flow conversion period! Small business accounting software and POS (Point of Sale) systems make quick invoicing easy. You can create a good invoicing template according to you with the help of invoicing software.
4- State payment terms clearly
If you like getting paid punctually, don’t leave it up to the customer or client to decide when your invoice should be paid. Send reminders or emails to them constantly so that they don’t forget to pay you on time.
Take away: Always mention the due dates in the invoices. A due date makes your invoices most likely to be responded quicker.
5- Establish a follow-up procedure for customers who miss payments
The more hastily you follow up on a missed payment, the better are your chance of getting paid. So set up a system for flagging late payments if you need to and a standard procedure for contacting the customer or client when his or her payment is late. Using an accounting software that sends you a notification of due payments are a great help.
6- Minimize any Errors
Invoice errors can cause your payments late. And if it is anything major then it can create mistrust and confusion with your client. Here is a tip, use efficient invoicing software that will automatically assemble costs and quotes, or tracked billable time, and generate invoices from that information. This minimizes the number of people required to produce quotes, thereby reducing the chance for human error. This, in turn, saves your business time, and eventually, money.
7- Choosing the Right Billing Software
Monitoring the accounts of your business in a spreadsheet is no more efficient. And the companies that manage bills on a spreadsheet are more likely to make mistakes and end up sending inaccurate invoices to a customer that ultimately delays your payments. Good billing software can actually turn out to be a good investment for your business.
There is a variety of software with different functions at various price points. Before settling for billing software, it is important to take your business into consideration and make sure you’re opting for the right billing & invoicing software for your business. That being said, no matter the feature set is, a good billing software will save your company countless hours by excluding manual data entry and constant follow-ups.
Common Mistakes People makes while Billing or Invoicing
1- Sending an Invoice That Includes Errors
This can happen to anyone. The invoice number is incorrect or, there are spelling mistakes and you haven’t referenced the PO or nor included information that the client requested? Even a change in dates can make your invoicing go wrong. These mistakes can be made when you are maintaining the invoices in an excel sheet. Alternatively, invest in a cloud-based invoicing software that minimizes human error.
2- Not Making it Easy to Pay
Though the client has received your invoice he is unable to make payment as they do not mention of a mode of payment. They need to know in what ways you are accepting payments, that is, either by bank transfer, cash or any other online payment transfer. This can be easily corrected by SlickAccount. Using which you can create customizable invoices as you want and the details will be added without any error.
3- Not Following up
It’s been weeks that you have send out invoices but still have not received the payments. Some of your clients may forget to pay you because they are busy or they just want to delay their payments. In either case, following up can help you get paid faster.
If following up can take some of your time that you don’t want to waste, use SlickAccount that help you send out customized reminders automatically to your clients or customer.
4- Not Itemizing Services
Some customers or clients want a detailed breakdown of itemized services. That helps them in tracking and recording expenses. While doing it from the start can make you avoid getting emails from your clients to resend the invoices.
5- No Specific Due Dates
Summit an invoice as soon as your work is done, don’t wait for your clients to send them. Also, specify the time within which you want to get paid.
Get Paid Faster with SlickAccount’s Invoicing Software
- GST Enable Invoicing
- Create Customized Invoices
- Email Invoices, auto reminder & take Online payments
- Save time by automating the invoice schedule
- Define the terms and condition as you want.
- Generate reports faster
- Follow up to keep track of your payments
Invest in your Business with SlickAccount and send out beautifully customized invoices and get paid faster.