Cash is the lifeblood of virtually all small businesses. Boosting your cash flow grows your entrepreneurial venture. One of the quickest and easiest ways to increase cash flow is through effective invoicing. Your customers hold the means to grow your venture but without effective processes in place you are bound to struggle financially. Small business owners can only pump so much of their own money into a venture before the business folds.
Many new entrepreneurs struggle with the invoicing side of growing a successful business. Doing the back-end stuff may be a less thrilling task but establishing a sound invoicing system ensures that your business receives any money it is owed.
Follow a few proven, effective invoicing tips to increase your cash flow and to keep your small business afloat during its fledgling months.
Follow Up
Set up a system for following up on overdue invoices. Customers may be struggling with financial issues or offline matters which lead to overdue invoices. Automating specific reminders frees you from uncomfortable, unpleasant reminder calls. Life intervenes. Sometimes your most well-meaning, loyal customer might back-burner your invoice. Use software to send out periodic, professional, and compassionate reminders to ensure that you collect on your invoice. If a substantial amount of time passes before payment is received, word your automated response with firm, direct and professional undertones. Be clear in your request before you release on any late paying customer.
Fire Clients
This last resort scenario will solve many of your invoicing problems because late paying clients are likely at the root cause of your cash flow issues. Even if you have steered clear of money mismanagement issues, a routinely delinquent client can be crippling your business and wreak havoc on your invoicing process. In extreme cases, fire your clients. Why work for free? Unless you have established a long term bond with a client who is experiencing difficult, trying times, let go deadbeats to make room for paying, timely clients. Halve your invoicing problems by letting go of poor business matches to make room for good ones.
Invoice All Completed Work
Clients who require a heavy workload need to be invoiced for all work completed to smooth out the invoicing process. Invoicing software records billable work to boost your business cash flow. Find time tracking software to handle this task because if a few employees are servicing one client you may run into a confusing situation at billing time. Again, don’t work for free. Ensure that all work is billed to keep your small business afloat during its early days.
Tack on Fees
In extreme cases, add overdue interest to move your late paying client into action. Both parties agreed on set payment terms. Although you can allow for some wiggle room, put your foot down if you see a problem developing. Tack on overdue fees to condition your customers to pay on time. Stand firm if clients complain about the fee; you are running a business. Businesses require cash flow. Do what is necessary to collect payment due from customers.
If you are searching for a software solution, you can create your invoices online at aynax.com.