Today we talk about simple yet effective way technology can help business owners be on top of their invoicing and keep the payment drama at bay.
You render a service or sell a product to your clients. Then you get paid for the service or product you served. In an overly simplified way, that’s the definition of a business.
But what if your customers take their sweet time when it comes to paying you? What if, the most important aspect of any business, getting paid, is
You need cash now. Cash flow is important to every business. As discussed in the post last week, healthy cash flow is the fuel that keeps a business afloat, breathing and functioning properly.
However, as a business owner, if the flow of cash gets clogged because of slow paying clients, one soon comes to a realization — the quicker they can get payments, the better.
But how do you make that happen? While you can’t force your clients to pay you faster, there are a few hacks you can apply and a few strategies you can put into place to make it easier for your clients to pay you back.
So, where do you begin? By using one or more of the following tactics, you can help motivate your clients to pay on time:
Set up An Invoicing System And Send Invoices Sooner.
Well, this might sound an obvious one, but often business owners lag behind their own invoicing.
This happens because either they don’t have an effective invoicing system in place, or because they are burdened by too much work, or out of sheer forgetfulness.
Even I, in my freelancing days as a content writer, sometimes forgot to invoice my clients.
Invoicing a client shouldn’t be a dreaded task you stall until the end of a month or even something you feel you need to spend much time on.
I suggest you rely on an invoicing solution that allows you to breeze through the whole invoicing process which will leave you more time to do take on new clients, projects or venture (or, to kick back and relax every now and again.).
You should start by looking for a solution with the following features:
- Customizable GST compliant invoice templates that will make your invoice appear more professional.
- The ability to send invoices from any device, anywhere, anytime, with the help of an active internet connection.
After you have an effective invoice system in place, it would be easier for you to stay on top of your invoicing. As soon as your client accepts the work is final, send an invoice. It’s more likely that the sooner you send an invoice, the sooner you will receive your due payment.
Set up Automatic Invoicing
If you are providing a monthly service and invoice a client the same amount on a recurring basis, you might want to consider jumping on an invoicing solution that will help you send recurring invoices automatically.
Let’s take a common scenario into consideration.
You are a business owner who has a customer that purchases Rs. 25,000 worth of product from you every month.
Now, you can either, manually prepare an invoice, where you add all the details, and then send it, every month.
Or, take an easier, much faster and efficient route. You simply use an invoicing solution that supports recurring features, prepare one invoice for the above-mentioned transaction, and automate it to be sent to the customer on a recurring basis.
Just think about all the time you can save by automating multiple invoices to your customers.
Now that we have talked about having an invoice system in order, setting automatic invoices for clients, let’s talk about the third most important aspect- getting paid.
Set Up Easy Payment Strategy
Because the easier it will be to pay you, the quicker you will get paid.
People are more likely to complete a task when it’s glaring and easy. And this applies to get paid and paying back as well.
If you’re limiting payment options to methods that take more effort, you’re less likely to have your client pay your invoice in a timely manner. Also, in this highly competitive business landscape, your customers would always have better options in terms of where they take their business to.
If your customers or clients hit a wall when trying to pay you, they will slowly take the thought of taking their business elsewhere into consideration.
To never face such an issue, you should enable multiple payment options so that every single type of customer be it a tech-savvy one or traditional one a can be catered.
You can do so by adapting to cloud-based accounting and invoicing platforms. There are several accounting platforms with invoicing features which will give you the power to provide multiple payment venues such as net banking, credit/debit card, and even the option to integrate a payment gateway of your choice, which will make the process of getting paid seamless and hassle-free.
Let’s move to the final aspect of an effective invoicing strategy — Followups.
Set Your Follow-Up Strategies
In an ideal world, all the services and products would be provided in a timely fashion and all the invoices would be paid within minutes.
Unfortunately, it’s not an ideal world we are living in. The truth of the matter is that invoices can typically take anywhere from two to eight weeks to get paid, and that can be a fairly long wait for a small business — remember, as discussed, it’s all about cash flow. This is why every business owner needs to have a follow-up strategy for their invoices.
Business owners should consider using an invoicing platform such as Giddh that allows them to quickly identify outstanding invoices through an aging report that gives them a comprehensive list of the clients that have been missing the payments and the amount associated with them.
On top of that, these online invoicing and accounting platforms have features of sending automatic payment reminders to the customers if they haven’t paid past the due date.
Most importantly, it should be agreed and accepted that most slow-paying clients aren’t trying to be malicious.
They understand that there are two sides to every business transaction and are willing to pay you for the services you rendered and products you sold. But when a process is difficult and uncomfortable, the end result is usually avoidance.
So if you want to be paid faster, it all boils down to making invoicing and payment as simple and painless as possible for both you and your clients. Once that’s achieved with the help of the right technology tools, the money will flow just as quickly and easily.
Got a point to make that will add value to this post or disagree about something? Comment below and let’s take the discussion forward.