For the last instalment in this seven part series, we’ve saved this painfully obvious but often mismanaged strategy for improving cashflow: Make it easy for others to pay you!
You’d be surprised by how complex some businesses make it just to pay them. Or, worse, they provide no obvious instructions on how to pay them at all!
It isn’t rocket science. If someone can’t quickly establish how to pay you, they will move on. And your invoice will go back to the bottom of the pile.
Let’s take a look at how you can make it easy as pie to get paid.
1. Details, details, details
Sometimes, it’s a simple omission that causes you not to be paid. When you generate an invoice, you need to be sure you include all of the relevant details.
If you’re expecting a cheque in the mail, you need to list a mailing address. If your business offers electronic payments, be sure to list the details for that, especially if you’re sending out electronic invoices (as you probably are). You don’t want to add unnecessary steps (like calling you to enquire about your address) that might delay payment.
Don’t give repeat late payers a ‘get out of jail free card’ because of this simple oversight.
2. Have it your way…
You’ll also want to accept as many methods of payment as possible.
Cash, cheque, and money order have long been established payment methods – and you surely welcome them with open arms. Even credit cards are old hat – you’re probably taking them already. But the digital age allows you to accept payments from platforms like PayPal, Google Wallet and Moneybookers, assuming you offer them as an option.
More recently, many real-world businesses have started accepting Bitcoin, the all-digital currency. It’s up to you if you want to go with a currency as volatile as Bitcoin, but you should be presenting your customers with as many ways to pay as possible, in any case.
3. Be clear about the date
Remember how we told you to use reminder letters to get paid?
Well, the only thing we should add is that you definitely want to state, up front, when it’s due. Then, repeat that date in the terms. And, encourage your sales staff to mention it to.
Sending out an invoice without a due date is like saying “you can just pay me when you feel like it.” So, for the sake of keeping your cash flush, be specific.
Once that threshold is passed, it’s time to start sending out the friendly reminders. Definitely recognise, though, that one of the biggest reasons for late payments is that your customer doesn’t know when it’s due. Don’t let that happen. Be clear about the date.
4. Get paid on the go
One exciting development for businesses that transact in the real-world, such as interior designers and tradespersons, is that you can now get paid on the go.
Since many devices, like iPhones and Android smartphones, now feature a near field communications (NFC) chip that allows electronic payment methods (such as PayPal) to send and receive payments directly from the phone, while on the go, getting paid is easier than ever.
What’s more, these apps have the added benefit of updating you when payments are made. Additionally, mobile banking apps allow you to know just how much cash you have on hand at whim. Take advantage of the latest technology to make it easy to get paid and also to know right when it happens.
If you want get paid, make it easy for your customers. Don’t make life any harder than it needs to be!
This article is sponsored by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (ANZ). The views and recommendations that are made in this document are those of the author and not ANZ. To the extent permitted by law, ANZ disclaims liability or responsibility to any person for any direct or indirect loss or damage that may result from any act or omission by any person in relation to this material.