Cash flow is the life-blood of every small business, but it can be difficult to keep the money rolling in – as everyone has clients who can’t/won’t/forget to pay.
Here’s a few ways to keep on top of your invoicing, so you can keep a healthy cash flow.
Be organised
Setting up an invoicing procedure should be one of the first things your company does. A big old spreadsheet of invoice numbers, issue dates, due dates and payment dates could be the simplest and most effective way of keeping track of invoicing. Setting reminders in your calendar for invoice due dates is also very helpful.
Be quick
Invoice promptly. Not only is that good for your business, but it’s also good for your customers. People who receive an invoice for something 2 months after the event are most likely going to have forgotten it ever existed – and no-one likes an unexpected bill!
Stay in touch
As soon as an invoice becomes overdue send out a reminder to your client, keep it relaxed and friendly and just make them aware that they now have to pay. Always include a copy of the invoice in your reminder too, so your clients know exactly what they owe and why.
Don’t be afraid!
Chasing payments isn’t a particularly fun job, but it is rarely unpleasant. Don’t be afraid of asking for the money that is owed to you. But if a customer does get upset, simply try to find out the root of the problem and work it out, offering payment in instalments can often help clients who are strapped for cash.
Use the law
In some extreme circumstances you may have a customer who simply refuses to pay. At this point you may have to use the law to ensure you don’t lose out. Often a simple Letter Before Action is enough to make people pay up.
Organisation and communication are the easiest ways to stay on top of invoicing, and to keep cash flow healthy.
