With the end of the financial year looming, now is the time for businesses to clean up any outstanding payments. Here are some tips to smooth out the process and improve your cashflow.
1. Communicate clearly with debtors
If you expect your customers to be disciplined with payments, it helps if you are meticulous with your invoicing too. As the end of the financial year nears, remind your customers of any invoices that have not been paid and ensure you have all invoices for each customer on the one statement. Email this to them and allow an appropriate time for payment, depending on your payment terms. Do not omit important details such as the amount owed, the payment due date, their terms of trade and the client’s payment history. When you provide this level of information, there can be no excuses from slow-paying clients.
2. Get on the phone and request payment
Never be afraid to call your clients if invoices are unpaid. Ultimately, they should appreciate a courteous, personal approach rather than an impersonal email, and hopefully it will prompt them to pay. Remember that payment is more likely if you can accept credit card payments over the phone while you are talking to them. However, cold calling still requires preparation. Before making the call, ensure you have all the relevant customer information in hand so you can speak authoritatively with customers and avoid having to get back to them with any information before payment can proceed. If the customer is having legitimate cash-flow issues, you could suggest making a partial payment on the spot, and arranging a payment plan for the balance.
3. Engage with clients if there is a payment dispute
Inevitably, there will be times when a client disputes your invoices. Rather than putting such cases in the too-hard basket or ignoring the issue, quickly find out exactly what the problem is and work with them to resolve the issue. Being upfront usually results in faster payments, and it also enables you to develop trust with your client.
4. Make it easy for debtors
The harder you make it to pay, the slower payments are likely to be. So simplify invoicing for your clients by providing clear banking and credit card details on your invoices. Let them pay their invoices on your website, too, or through other online platforms as many people now prefer to make payments simply and at a time that suits them.
5. Call in the experts
If you still don’t get paid, contact us to help you. Outsourcing your payment problems allows you to get back to running your business while we address your issues with debtors.
For more information, contact us on 03 9629 8777 or collect@kearleylewis.com.au.