Convert your business to Xero
Xero accounting software is a great tool to help you get paid faster, one of the biggest causes for customers taking time to pay is the delay in sending out invoices, most businesses will not pay without an invoice received, so it’s important you send out invoices as soon as possible.
Don’t post your invoices, send them online invoices, with Xero you can send a link to your invoice which your customer can view online, this allows customers to not only view the current invoice but also allow them to view a statement showing all outstanding payments. This will encourage customers to pay what is owed not just one invoice.
Xero online invoicing also has a pay now button which will allow customers to pay via PayPal or by Debit/Credit card.
Be clear with your payment terms, when sending your invoices ensure that your payment terms are clear on the invoice, this might be bank details of which payment should be made to, in Xero this can be set up as standard in both the invoice and the email that sends the invoice.
When sending invoices it helps to attach relevant information avoiding any opportunities for the customer to dispute your invoice. Xero allows you to attach files to invoices such as accepted quotes, agreed variation costs etc. so that when they review the invoice they can also view attachments.
Historically businesses offer 30 days to pay an invoice, if your business offers 30 days, try reducing your payment terms from 30 days to 14 days; feedback I’ve had from clients has confirmed this does have a positive affect on cash flow.
Let Chaser take the hassle out of chasing debts
Once your invoices are out there don’t be afraid to chase your debts. It is a well known fact that those who shout the loudest get paid, therefore if you don’t chase your debts it’s likely you will fall to the back of the queue.
That is why I recommend that you sign up with www.chaser.io they are an award winning add on partner to Xero that integrates and allows you to automate the chasing of outstanding invoices but still maintaining a personal feel.
Accept card payments
Rather than spend time chasing smaller debts I recommend you try and prevent them becoming debts in the first place and allow your customers to pay you by card.
Many businesses think that accepting card payments is only for retailers, those days have gone. Many businesses now accept credit/debit cards via merchant services such as Worldpay. These services traditionally come with a terminal that stays on premises and come with a monthly rental and smaller transactional costs.
However, for those that need a mobile offering products such as iZettle or PayPal Here offer a flexible approach with no rental but slightly higher transaction costs.
I appreciate accepting card payments leads to additional costs, however on the whole I believe these costs will be outweighed by the increase in cash flow, time saved in chasing debts and potentially a reduction in bad debts.
If you would like to see how Xero, Chaser or accepting card payments can boost your cash flow please do get in touch.