Your company appears to be doing well on paper. Sales are rising, but your expenses haven’t actually grown. However, you continue to have cash flow issues. This is a critical risk for companies of all sizes and in all industries. While there could be a variety of reasons for your cash flow issues, one of the most obvious places to begin is by opening your records and looking at your customers’ invoices. This entails determining which invoices were issued, paid, and received. You should have a better knowledge of what’s going on with your cash flow if you track your money movement.
Few steps to help you encourage your customers to pay on time
Make billing a top priority
Cash flow is undoubtedly the most essential factor in determining whether your firm succeeds or fails, regardless of its size. While it may seem self-evident, the sooner you send out invoices to clients, the sooner you’ll be paid—and the money will keep flowing.
Send to the Correct Person
Just because you worked with one person on a project or during a sale doesn’t mean they’re in charge of the money. Perhaps they have an accountant or business partner who manages all of the incoming invoices. Furthermore, that individual may use a separate email address for their accounting purposes.
Billing on a recurring basis can be set up
If you have a client who gets invoiced on a monthly basis, this is a great choice. Simply enter the customers’ billing information, the invoice amount, and the payment method into your billing software. Because the money is automated, you don’t have to make an invoice and wait for the client to pay and authorize it; the money will be removed automatically.
Accept Electronic Funds Transfers
Accept a variety of payment options to make it as simple as possible for your customers to pay their invoices. Accepting electronic checks, credit cards, and payment portals such as PayPal are examples of this.
Customers incentives and late payment fees should be available
Offer a small reward to your customers to encourage them to pay the invoice. Even a minor discount, such as 5% off their bill if they pay before the conclusion of a 30-day pay cycle, should be enough of an incentive to pay the invoice early or on time.
Keep an eye on your customers’ invoices
You must have a system in place to keep track of your invoices and customers. However, you don’t have to make it that difficult. For your invoicing, a simple numerical system such as 00001, 00002, and so on will suffice. You’ll use this system to keep track of your invoices and locate them quickly in the event of an audit.