Five Top Tips For Getting Paid Faster
As a business owner, having the finances to run your business is essential. However, when you have a lag in cash flow, this can have major consequences in both the long and short term. Additionally, this can affect your ability to pay rent, utilities, services, wages and even suppliers. A study commissioned by Intuit Australia and PayPal Australia found out that most Australian small businesses are owed an average of $13, 2000 each and that the business owners spend a total of 12 days annually chasing money.
In addition, the study also revealed that small business owners are taking out loans to cover daily business expenses. Fortunately, it’s never too late to recover. Learning about your business’ cash flow should be a priority. Here are some five ways you can get paid faster.
1. Have a client sign a contract before beginning work
A contract is a legal agreement between you and your client and it indicates the deliverables and details of the work to be done. Moreover, it delineates how much the client needs to pay and when to be paid. This protects both you and your client in case of any breach of contract.
2. Invoice as early as you can
While sending an invoice can seem like a bother, putting it off tells your client that getting paid on time is not your top priority. When sending an invoice, clearly indicate when the client needs to have paid up. Keep in mind, most people are now using their mobile devices for business. Send an invoice that can be accessed via a tablet or a smartphone. Add a pay now button next to your invoice as opposed to prompting your customers to go pay using another channel.
3. Offer incentives for early pay
Another great way to ensure that your clients pay on time is to offer incentives for early pay. Advertise the perks you’ll offer on the contract, invoices and on signage if you have a physical location. This will encourage your customers to pay early and enjoy other benefits.
4. Avoid charging a late fee
When running a business, keeping your clients happy and satisfied is key to a long-term relationship. Do not charge late fee for clients who delay paying for the products or services provided. Instead, ask your clients which mode of payment would be easier for them. You can also find a payment plan that works best for both you and the client.
5. Stop by in person
Anyone can ignore an email, phone call or even a bill sent via mail. Nonetheless, it’s hard to ignore someone who shows up in person. Be sure to ask how everything is going on and seek to understand why payments haven’t been made in a friendly way.
Finally, re-evaluate your relationship with non-paying clients. It would make sense to find new clients who are ready to pay up to keep your business up and running. Weigh your options and decide on the best course of action.
To find out about other ways to improve your small business, give our friendly team at Scott Partners a call to schedule an appointment. We can give you professional, clear advice and help your business grow now and in the future.