No small business owner likes getting paid late (or not getting paid at all).
Cash flow is integral to any small business’ success (and survival). It’s pertinent to get a strong handle on your cash flow, starting with taking serious control of your receivables management. Start utilizing precautions to ensure your customers will pay, down to every last detail.
A great place to begin is in the very invoice you send the customer. Believe it or not, there are actual terms you can utilize that will help your customers pay you on time.
1. Be Specific.
How you explain to a customer when they must pay can have a huge effect on how quickly they do so. You need to lay down the invoice payment terms as clearly as possible. Also, never use terms like “net 30” when explaining the due date. Instead, say something such as “Your payment is due in 21 days”, which helps customers map out the exact time line.
Be sure to provide the EXACT date of payment (such as Friday, August 31, 2012) and be strategic in choosing the date. Pick a payment date that is easy to mark on a calendar. Always explain how much of the payment is due (i.e. In full? 50%?) and how you accept payment.
Leave no room for the customer to question your terms.
2. Be Polite.
We were all taught at a very young age the importance of a please and thank you, but sometimes we forget our manners. Invoicing is not a time to forget basic etiquette.
In fact, a simple please or thank you can increase your chances of getting paid by 5%. Such a simple gesture can have such an enormous effect. Never let those manners be absent from your invoices!
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