Five tips to help you get paid on time
Late payments can cause serious cashflow issues and stress for small-business owners.
According to the early results of an inquiry into payment times and practices that is currently being undertaken by The Australian Small Business and Family Enterprise Ombudsman (ASBEFO), big businesses and some governments in particular are taking longer than ever to pay small businesses, with almost 50 per cent of small businesses experiencing late payments on at least half of the bills owed to them.
Here are five tips to help you deal with slow payers:
1. Make it really easy to pay, with a ‘pay now’ button if possible
The simpler you can make it to pay, the less likely that your customer will put paying you in the “later” basket. There are many apps and programs that you can use to send professional invoices quickly and collect payment online straight through the invoice itself, with a “Pay Now” button to allow immediate payment. Some payers might still wait until the deadline, but some might pay immediately just to get it off their to-do lists.
2. Allow customers to pay how it best suits them
Accept a range of payment types so that your customers can pay in the way that suits them best. Consider offering the full range of payment options, including credit and debit card, EFT, cash and PayPal.
3. Be proactive about following up on invoices
Keep track of when invoices are due and send a reminder a few days in advance. Perhaps dedicate a certain time each week or day to check your invoices and send reminders to customers who are late or even approaching the due date. Of course, handle it with diplomacy and tact by tailoring the reminder message if possible to ensure that it is polite but also clear about your expectations around payment.
4. Tighten your payment terms
Ask yourself if it might be possible to adjust your payment terms from 30 days to, say, 15 days, to increase the chance you’ll be paid on time.
5. Offload the burden!
You could consider offloading the work of reconciling accounts to a trusted bookkeeper like SWAG. We have a range of packages available to take away some or all of this burden for you.
Can we help?
SWAG knows that running a business is busy. There’s little time to spare, and we want you to have one less thing to worry about. Your books, payroll, taxes, debtors, creditors – all those accounting tasks you probably find distracting and disruptive to your business operations – can be handed over to us.
Please get in touch with the SWAG team to find out how we can help you.