As a small business owner, you wear a lot of hats and juggle many different responsibilities. But above anything else on your plate, you know it’s imperative customers pay you on time. You need cash flow to manage your business, pay your debt and invest in your growth.
Here are five easy ways to get paid faster:
- State your payment terms clearly. Before you begin any work with a customer, settle your terms and conditions. It’s best to have an agreement in place that clearly defines your company’s expectations for completing work — the project’s parameters and how much it will cost, when payment is due and how the customer can make the payment. If you opt to add penalities or rewards for early or late payment, specify the details in any documentation provided.
- Expand your payment options. Your ultimate goal should be to make it as easy as possible for customers to pay you. Ask your customers which payment methods they prefer so you can ensure they can provide payment within your terms. Additionally, when you offer multiple ways to pay, it’s harder for customers to avoid making a payment on time.
- Use electronic invoicing. If you’re still sending paper-based invoices to your customers, you may want to rethink your process. When you upgrade to electronic invoicing, your invoices are sent directly to your customer — you don’t have to worry if it was lost in the mail or delivered to the wrong person. Additionally, most electronic invoice services offer customers a way to pay directly to your account with the click of one or two buttons. Plus, there’s a better “paper” trail so you can track delivery and payment if desired.
- Send invoices as soon as possible. Make it a habit to send invoices as soon as you complete a project, so your customer receives the invoice when your business is “top of mind.” If you wait to send invoices, your customers may delay payment as well.
- Follow up on late payments. While likely not your favorite thing to do, you must follow up with customers who have not paid you on time. Consider sending a “payment due” reminder email, or give your customer a quick call. If you use electronic invoicing, you can automatically set up reminders to ensure customers pay you on time.
Every business is different, but implementing these practices will increase your chances of getting paid on time and in full. And once you receive payment, you can then pay for the things you need and invest in your company’s future.
To learn more about the ways Pinnacle Bank can help you manage your cash flow, talk to one of our Business Specialists today at 877.759.7939.