How to Ensure That You Don’t Encounter Cash Flow Issues When Collecting Invoices

Most small businesses in Australia do not have the luxury of surplus cash. They may not have a sizeable bank account balance that allows them to treat cash flow as an afterthought. As a consequence, it's very important for them to handle invoicing and collections very carefully and professionally, so that no issues are encountered. How can you make it easier for your customers to pay you, by adopting some certain rules?

Being in Control

A successful business is undoubtedly one that sticks around. Balancing cash in and out can be challenging at the best of times, with unexpected obstacles also getting in the way. You will be much more likely to succeed if your invoice payments come in on time.

Making an Assumption

The first thing that you should never do is to assume. You might want all your invoices to be paid within 10 days, but does that new client have the ability to do this? Often, their business is set up so that their inputs and outputs are balanced over a 30-day cycle. Consequently, they may not be flexible, and you don't want to find this out after you've provided their services or products.

Cash Discount

There's nothing like an incentive to get some people to take action. Have you thought about offering a cash discount, if they pay by return instead? There's no harm in trying this with all your new clients, so long as you cost it in and it makes sense, of course.

Initial Communication

For many small businesses, the only time that they formally exchange paperwork with the client is when they send the invoice. It would be much better to send a written quote for the work ahead of time, to avoid any confusion or disagreement. Always ensure that you follow up with at least an email if things change during the course of the job and additional costs are incurred.

Crystal Clarity

Under no circumstances should the content of your invoice be unclear. If the client has questions, then this will undoubtedly delay the entire process. Therefore, put all of the details down very clearly and include relevant records, work schedules, specifications and other data.

Meeting Their Needs

With bigger clients may come additional needs. For example, their internal process may revolve around the "purchase order." If you don't include the purchase order number that they give to you at the beginning on your invoice, it's not going to be paid. Don't forget that some companies only pay invoices on a certain day of each month, so make sure that you get your invoice in before that deadline.

Getting Expert Assistance

When you work with a qualified bookkeeper to help you keep everything on the straight and narrow, you may be amazed how efficient your cash collection process becomes.