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If you are a small or medium business, and especially if you are a recent start up, the subject of being paid is one which should be on your mind all the time.<\/p>\nIf you are a small or medium business, and especially if you are a recent start up, the subject of being paid is one which should be on your mind all the time.<\/p>\n
A sale is not a sale until the money is in the bank; until that time, it’s just a nice possibility. So how can you ensure that your invoicing process is working as hard as possible to ensure that you are getting paid promptly?<\/p>\n
Ask For Payment<\/strong><\/p>\n Don’t be shy, the money is yours, and its owed to you. Send out an invoice as soon as you have delivered the goods or services, if not before. On the day that payment is due, or the day before, call your debtor and ask politely when payment will be made.<\/p>\n Know Your Client’s People<\/strong><\/p>\n Make it your business to get to know the people in your client’s company who are responsible for paying the bills. Build a friendly relationship with them, yes, send them a card at Christmas and ask after their family. Nice people get paid first, and pretty lowly clerical workers often get to decide who are the people who are going to be paid when they are managing their own cash flow tightly.<\/p>\n Set Up Favorable Terms<\/strong><\/p>\n In an analysis of over 12 million invoices, accountancy specialists Xero found that on average, invoices were paid two weeks after their due date. So, if you want payment at thirty days, then make your settlement terms 14 days.<\/p>\n Offer Early Settlement Discounts<\/strong><\/p>\n This is very useful if you have well heeled clients; big companies will always try to use settlement discounts, as they are often cash rich. Beware though that they don’t pay late AND take the settlement bonus.<\/p>\n Make Your Invoices Clear<\/strong><\/p>\n Make sure your invoices are very clear and easy to read. Don’t have invoices which say \u201cTo dfG5\/4 chain saw\u201d, instead have them say \u201c1 x dfG5\/4 SuperSwift Pro Chainsaw 15\u201d Blade with Case\u201d. Make sure individual item costs, relevant taxes, sub totals and totals are clear and easy to understand. Someone has to approve that invoice, and it’s much easier for them if the whole thing is in clear English.<\/p>\n