If you are a small business owner looking to improve your cash flow management, these tips will help you get a hold of your receivables to avoid revenue shortages and establish long term capital advantage:
Send electronic invoices
The first essential step to expediting your invoicing process is to ensure that your bills are actually received by your clients and do not get lost in a sea of postal mails. Use online payment tools such as PayPal to send your invoices to the requisite party as soon as you’ve delivered the promised product or service, and set a payment due date so that the client does not have an excuse for late payments. Such online payment interfaces also enable you to send frequent reminders or even report clients in case they fail to clear your invoice after the said due date.
Offer multiple payment options
If you want to get paid on time and collect your cash quickly, allow your clients to pay you via PayPal, a credit card or an electronic funds transfer (EFT). All these methods ensure instant and safe fund transfers from their bank accounts to yours and save you from waiting endlessly for collecting your accounts receivables.
Set crystal-clear credit terms
If you’re a start-up or a small company wanting to bag as much business from your clients and not chasing them for payments for the fear of losing lucrative projects, you could be seriously hampering your cash flow management. Extending too much credit takes a massive toll on your accounts receivable. However, if you must offer a credit on your service, check your clients’ credit history and ensure that they pay their bills on time before setting up a credit account for them. Importantly, set clear terms of credit agreement and ensure that your clients are aware of the details before signing any contracts.
Hire an accountant
If you’re too busy chasing clients for payments or too wary of reminding them again and again for the fear of losing their confidence and business, a great way to deal with the situation is to hire a professional accountant and let him take care of all accounts receivable. Experienced accountants know their job and how to do it efficiently. Besides, this will not only help you achieve better cash flow management but will also help you save your precious time and energy and focus on other aspects of your business.
Choose invoice discounting
When all the above strategies fail and you still don’t get your invoices cleared on time, there’s still one last resort to try – invoice discounting. Invoice discounting helps you get your bills cleared within 24 hours! The funding and repayment process is 100% online, which means you are not bogged down by piles of paperwork, hidden fees or personal guarantees. You can get as many invoices cleared as you want without paying any set-up fee or signing any contracts and get your business funded at incredible low interest rates as compared to banks or other modes of financing.
Here’s hoping that these tips will help you manage your receivables better! If you wish to know more about improving your cash flow management or getting your business funded instantly through invoice discounting, please visit www.fundx.com.au