Are you working hard but never have any cash in the bank?
If you have been busy working and your invoicing has been healthy, but you get to the end of the month and don’t have any cash in the bank, then collections might be an issue for you.
A healthy bank balance can mean the difference between you enjoying working on your business or you stressing and struggling day-to-day to get enough cash to pay the bills.
You need to implement a collections process and include the following simple steps:
- Make sure payment terms are included in your terms of engagement and contracts. Make them transparent so there is no confusion when it comes to paying the invoice.
- Make it easy for people to pay. Use payment options like a credit card payments app which allow you to take payment at the site, Pay Pal options for online invoicing and even direct debit.
- Systemise your invoicing and collections process so you know the steps and when they need to happen, then stick to it. For example, if your invoice terms are 14 days, know that you are going to send out a reminder at 15 days if they haven’t paid and call them two days later.
- If you don’t want to do it yourself, then use a third party. They can act as the accounts person and enable you to maintain the relationship with your clients.
- If you have any doubts about payment there are a number of things that you can put in place to minimise the risk. For example, ask for the deposit up front, for small jobs take payment immediately the job is finished via credit card, use credit watch service to verify credit history or set credit limits for clients.
If you don’t have one already, you need to put in place your invoicing and collections process so that you improve your cashflow and start enjoying growing and managing your business.
If you would like more detail or some assistance in setting up and managing your collections process, call Clever Cow on 9981 3137
