You’ve taken the step and started a great business. So, how do you get your customers to pay you on time to keep the cash flow cycle humming? Here is a list of suggestions that will assist in keeping the cash flowing into your accounts so your business can continue to run smoothly!
- Start with the right information. Clients won’t be able to argue paying if you’ve double checked the entity details such as the use of a new client form signed by both parties.
- Clearly communicate and agree upon trading terms upfront, ie when setting up a new client include your trading terms on the form, discuss this with them and ask them to sign in agreement/acknowledgement before progressing with services/goods agreement.
- If a customer suggests that you Invoice their Family Trust, remember to address it to the Trustee of the
Family Trust, or you could be walking into a big headache if you try to recover from a trust .
- Delegate debt responsibility to a particular team member. This person is 100% responsible and not the director who may do his client ‘friend’ a favour by offering different trading terms.
- Send timely and regular statements. (Xero allows you to send out a statement to every customer with outstanding invoices with ease and great efficiency). We suggest a courtesy follow up phone call with potentially slow-paying clients to ensure they’ve received it.
- Set up monthly direct debits options where payments are automatically charged for clients on fixed fees or a regular commitment
- Get specialist help – a debt collector service or agency! Some will only charge you a % based on amounts received. So no win no cost to you. Debtor Daddy is a simple yet effective way to assist with email reminders for your debtors. It also has a relationship with a debt collection company who can take on the debt after a certain point and will only charge you a percentage of the invoice amount on receipt.
For more information or if you would like to discuss some options to help your business contact Team EASE today.