Quick answer: no. Customers and clients don’t seem to understand just how vital it is that they pay you on time. What’s so strange about this phenomenon is the fact that nobody denies that you should be paid. They just deny that you should be paid at a moment of your choosing, at a time that is convenient for you.
Things can’t continue as they are. Late paying customers are putting your business finances at risk. Every month it feels as if you’re about to hit a cash flow crunch and totally run out of money. So what can you do about this sorry state of affairs?
Set Up Recurring Billing And Automate Payments
Most of the time, customers aren’t deliberately avoiding paying you for some nefarious reason. They just forget. And when they forget, you have to chase them up for payment and money gets to you late.
There’s a simple solution to all of this of course. It’s called recurring billing. With today’s banking tools it’s super simple to set up.
All you need is the customer billing information, online banking software and the amount to be billed. So if you have a customer that regularly uses one of your services, this may be the way to go.
Cover Your Cash Flow With Invoice Finance
B Cash Flow Positive is a company that talks a lot about invoice financing. The idea behind invoice finance is to borrow against your accounts receivable.
Customers not paying on time? No problem. You can simply go to one of these finance companies and get a loan, backed up by the money you’re owed by clients. Usually, you can get funding within 24 hours, meaning you don’t have to cut corners at your business.
Keep A Database Of Customer Transactions
If you’ve got a lot of clients on the books, it’s important that you keep a client database to keep track of client payments. Even in the healthiest of portfolios, there will be some clients who simply aren’t paying up on time.
The good news is that there are now quite a few online customer database tools to make keeping track of them easier. No more having to flick through dozens of spreadsheets to find out who has paid and who hasn’t.
These tools also allow businesses to adopt a carrot and stick approach to invoicing. Companies who always pay up on time can be made eligible for savings on their future bills.
For instance, a company that has paid on time for the last six invoices could be offered a saving of 10 percent on the next. Companies who rarely pay on time can also be incentivised to pay on time with late penalties. Talk to your accounting department to discuss a good way to carry this out.
Always Use Electronic Invoicing
Electronic invoicing is faster than sending invoices through the post. It can also give customers and clients many more options to pay. For instance, some electronic invoices come with built in card payment options. Estimates suggest that these options can speed up invoice payment by 2 to 3 working days.