Cash-flow is king in business. What this means is that managing and controlling your cash in business can be the difference to success or closure. Without cash you can’t pay your employees, your bills or buy your materials.
Busy businesses don’t want to spend time chasing invoices. You’ve done a great job, surely your customers know to pay on time. Well, sometimes this is not the case. We know that there is a direct link between the frequency of following up late paying clients and how quickly you actually get paid.
That’s why Xero’s new Invoice Reminders is an excellent way to automate your initial reminders for customers.
Our top tips for implementing this system are:
- Don’t set and forget – make sure you keep you eye on your Accounts Receivable and the customers outside their payment terms. Customer Service is critical to business and you don’t want to be sending reminders to customers who you may have spoken with already, or have particular circumstances you know about (maybe you’ve had a delay in delivery yourself).
- Take time to tailor your standard templates to reflect your business language and make it consistent with other forms of customer communication. Even though it is chasing payment, it is still a form of customer engagement and service that will reflect on your brand and reputation.
- Make sure your customers understand your payment terms. Make the process of receiving payment from your clients as easy as you can. Have multiple payment options (cash, credit, EFTPOS). By using Xero add-ons you can also link payment options straight from your invoice – making it very easy!
- Send your invoices to customers as soon as you can. The sooner your customer has their invoice, the quicker you are likely to get payment. It’s a good idea to send an invoice when your customer still remembers the service or product you delivered. This saves on questions and will help the process for both parties. It’s not a good idea to delay sending an invoice and then chase your payment terms straight away. You set the expectations by being prompt with your own systems first.
Is your business not on Xero? Contact our team on email@example.com or phone 03 9394 7024 and we can set you up with a trial today and organise free conversions from other bookkeeping data.
Don’t forget our popular Xero Support Package for small business – it’s a great way to take the hassle out of your bookkeeping.