Small-scale businesses face the most deteriorate issues when it comes to keeping up with invoicing, especially, if it’s just on the verge of beginning. Late invoices can lead these businesses into cash flow trouble and simultaneously keep the future profit margin hanging at the bay. However, if played a little smarter, all these payment fuzz could be avoided. Take a look at the following 3 strategies that can get you paid on time.
Follow-up Payment Procedures:
It is a sad fact for most of India’s small businesses as clients do not pay on time. A report from the International Finance Corporation revealed that more than 60% of SMBs have to wait over 2 Months to get paid. This clearly is an unhealthy gap of payment and this absence, of course, affect these small corporations adversely. You can avoid this cash crunch by implementing robust steps to deal with late payments. Initially, you will have decided upon a time when you would like to begin the follow-up action for late payments. In general, you should keep it just after the invoice/payment is past due. In the next step, you should be fixing the way to contact your debtors for e.g, via letter, email, phone or all of them. Consider also sending a monthly account statement in detail with the list of pending invoices and amount owed, so your debtors have a clear picture of how much they need to pay.
For an easier approach, you can have templates ready for follow-up and a script for calls to make sure that the recovery process is getting effectively handled. If you have run out of the option to proceed further in collecting the payment then as a last resort you could also opt for a debt collection agency which can help you to get your money back via legal actions.
Change In Payment Terms:
This is one more way to keep your business cash flow intact. Revising your payment terms with the peculiar instruction of when and how you would want to pay your clients in order to secure your income. Most of the businesses set due dates for 30 days, which seems to be quite more than enough time, however, you should reconsider it if you want your invoices to get clear from the pending list. Certainly, a business strategy is to offer a discount to clients to encourage them for paying on time and on the contrary, charge them with late fees if they fail to make a payment on time. Well, one can definitely invest in doing some research and find out about what payment terms the other companies are offering to remain healthily in the competition.
Small business owners have often got a lot more on their plate for the initial few years. In such instances, it is always suggestive to automate the entire invoicing process for efficient working. Nowadays, businesses can directly opt for invoicing services by adopting ready-made software which can perform and excel all invoicing related tasks rather than to build such tools which are neither cost-effective nor time-saving. One should opt for services that are affordable and have features & functionalities that could propel your business by getting you paid faster.
In a Nutshell:
Moon Invoice can be an integral part of your business with not much hassle. Quickly generate recurring invoices, easily view and send account statements, offers multiple currencies & payment methods, track your expenses, print activity log and reports and many more to keep your business not only up to date with your clients’ payment but also to ease your all the daily invoicing tasks.