Many medium-sized or small businesses have found that the primary challenge that faces them is billing. Taking business owners away from working to grow their businesses, invoicing can be an afterthought. Unfortunately, allowing invoicing to take a back seat is never a sensible course of action. Over time, invoices pile up, accounts go past due, and cash flow dwindles away. Implementing a strong accounts receivable management strategy is vital.
Business owners often struggle to find the time to send invoices. And, clients also often fail to pay on time. This has an impact on their accounts receivable rate. You can’t force clients to pay on time. However, there are some tips you can implement to improve your cash flow.
- Prioritizing Invoicing And Billing
While billing isn’t a lot of fun, it must be a top priority. One of the most important elements of your business is cash flow. The more quickly you invoice your client, the more likely you will receive your payment on time.
- Building A System
Losing track of bills and invoices can be all too easy. Having an organized numbering system is vital. Consistency is the key if you want to ensure you receive payments on time.
- Make Payments Easy
A major part of receiving money on time is facilitating convenient payments. An advanced web portal that allows customers to pay conveniently at a time and place of their choice is ideal. Electronic payment options mean that clients can use their preferred methods, such as ACH processing or their credit/debit cards. Allow clients to use their mobile devices or PCs to make payments rather than having to write a check. This is the best way to get your money faster.
- Sending Reminders
Your clients may not have deliberately chosen to not pay you. They may have just forgotten. Send out a polite reminder.
- Make Deadlines Clear
It’s normal for a business to set appropriate payment terms when sending an invoice to a client. Usually, the terms are “Net 30” for invoices over $500. Lower amounts can be due as soon as the client receives the invoice. Make sure you note the payment terms on every invoice.
- Reconsider Your Price Model
All clients have a different budget, so you may want to charge different amounts to each one. Sometimes, however, reviewing your price model is useful. Are you asking for enough payment for your service or product? Analyze how much your competitors charge. When clients think they’re getting the best value from you, they’ll be more likely to make timely payments.
- Polite Invoicing
Building up a strong client/business relationship is a top way of keeping accounts receivables flowing. Using polite language to follow up on invoices is more likely to result in a payment.
Turning Your ARM Collections Into Cash From Chaos
Although invoicing and billing are challenging, every business must address them. Taking these steps to implement change will prove highly beneficial. Simply by staying polite, reminding clients about invoices, pricing correctly, and organizing your collections, you’ll make an enormous difference. Putting in place an electronic payments system, such as that offered by BillingTree, is another advantageous move. Remember, the easier it is to pay, the more money you’ll receive. And, that’s the goal of every business.
By following these seven expert tips, it’s possible to improve your ARM Collections system. These simple measures can go a long way toward helping you receive more money on time. After all, it’s only by improving your cash flow that you can grow your business. That is something that is surely your ultimate aim.