It is frustrating to do some work and not get paid.
So many business owners can’t manage their time well. They’re out on the road for most of the day doing tasks related to their business and customers. They come home at the end of the day with hours of invoicing to do. Many are exhausted or have personal commitments to attend to, thus the task of invoicing is put on the backburner. They sometimes delay this task for a day, a week or even longer. They want to complete the invoicing, but cannot find the time to do so.
With the emergence of mobile technology, invoicing on the spot is now possible. There are various apps or software designed for just this purpose. For example, the MYOB Pay Direct.
With a smartphone, you can invoice your customers and email the invoice promptly to them. You no longer have to wait to go back to the office or get home to use the computer.
You can also take payment on the spot. It’s easier to invoice customers immediately after you have completed the job, take the payment and sync the figures to their accounting software,
Cash flow is normally stretched for the majority of enterprise owners.
Having the ability to invoice on the spot allows you to begin collecting income faster.
If you delay sending an invoice, it sends the message to the recipient that it is not important to you. As a result, they will not prioritise paying you. This is human nature.
Including clear-cut payment policies on your invoices, and sending them on time sends a message to your customers and suppliers that it is a priority for you, and so they will send payment on time.
Establish good relations with your customers.
Regardless of what your business is, it is important to create great relationships with your customers. In an ideal world, there would be no need to doubt your invoices or experience uncomfortable debt collection talks. However, this rarely happens.
Here are steps to ensure your accounts are merely the result of these good relationships, rather than the means that destroy them.
- Make sure your customers receive the invoices fast and you eliminate the possibility of them getting lost by emailing them.
- Minimise any cause for misunderstanding or disagreement with your invoicing. Prevent questions by putting clear, full descriptions on your invoices. Questions or disputes will just hinder payment.
- Make various payment options available to your customers.
- Send invoice immediately and maybe provide incentives when customers pay early. For example, offer a discount if they send the payment within a shorter time period.
- If a customer is unable to pay on time, talk to them about it. Find out if they are experiencing any problems. This would make them feel heard.
Watch your receivables report closely.
Monitor your receivables report, perhaps look at it once a week. If you see a customer hasn’t completed payment, act on it immediately. Finding out about a problem after a month or months have passed can hurt your cash flow – and your relationships.
Prioritise your invoicing and receivables and you’d be surprised to discover that your customers are doing the same.
Turn on your bank feeds for easier reconciliation.
Reconcile your transactions using bank feeds to narrow the cash flow gap. The debits and credits from your bank account are captured through bank feeds. You can then drop them into your online accounting software. You save valuable time by trimming down data entry and remove potential data entry mistakes.
Consult a good accountant to help you send out invoices and collect payments on time. PJS Accountants offer the help needed to handle accounting, compliance, and strategic planning challenges. We provide a range of services that assist in reducing the challenges businesses face – so you can have more time to do what you do best, and that’s running your business effectively. Contact PJS Accountants for enquiries.