6 tips to help you get paid faster

Want to improve your cash flow? Encouraging customers to pay your invoices on time could help create stronger cash flow in your business. Here are six simple actions you can take to increase the likelihood of getting your invoices paid promptly.

What we'll cover

1. Upfront deposits
2. Payment terms
3. Invoicing
4. Client contacts
5. Payment methods
6. Invoice reminders.

 

1. Proceed with caution when taking on new customers

Everyone loves a new customer, except when they turn out to be a slow or, worse, a no-payer. How much risk you’re willing to take on may be proportionate to how much you’ll be billing for. If it’s a big number, then smart operators often ask new customers for a deposit or even full payment upfront – yes, before the customer receives the goods or service.

 

Remember, trust works both ways. So once the payment lands, then the business must deliver a cracking good service or product – on time.

2. Set clear payment terms

Many businesses give their customers a set time period between when the goods or services are provided and when payment is due. These are called payment terms and should be established at the outset to avoid any misunderstandings once you start doing business.

 

One way to encourage early payments is to offer a small discount in your terms for paying before the due date or a discount on future purchases.

3. Invoice promptly

Be on the front foot with your customers and invoice them as soon as you can. It's a good idea to do this straight after you've made your delivery or finished a job.

 

And make sure your invoices can be opened on mobiles, and potentially feature a 'pay now' button linked to a payment process.

 

If you're providing a mobile service such as a trade carried out in customers’ homes, you could receive payment faster by taking it on the spot. A simple way to let your clients pay by credit or debit card or digital wallet is to have an app such as Westpac EFTPOS Air on your compatible smartphone. It means that your everyday mobile can also be your EFTPOS machine, with no extra hardware such as dongles required.

4. Send the invoice to the right person

With small businesses, you're likely to be sending your invoices to the owner. But in larger businesses, the person who you deal with on a day-to-day basis can be different to the person who does the account payments.

 

Make sure you find out exactly who you need to send invoices to, so they can approve payments without delay. Also, make sure all of the details on the invoice are correct and include due dates, so your customer has no reason to come back with questions or excuses that impact payment.

5. Offer multiple ways to accept payment

One way to help avoid late payments is to let customers pay you the way they want to, which may mean offering them different ways to pay invoices. It's a good idea to feature all the payment options available on your invoices to encourage clients to pay early.

They might include:

• Direct bank to bank transfer (listing your bank account BSB and account number on your invoices)
• Direct bank to bank transfer using  PayID®(featuring just the ABN or mobile number you've registered for the service)
• Payment by BPAY® if the scale of your business merits applying for an account
• By credit card over the phone using a virtual terminal
• Paying you in person via EFTPOS Air or an EFTPOS machine, or with cash
• Paying by post with a cheque
• An international payment method (noting that to accept international currencies you may need a foreign currency account.

6. Follow up your customers if any payments are overdue

Keep on top of when your invoices are due and call customers directly if invoice payments are late. Or to avoid the time and hassle of chasing unpaid invoices yourself, check if the invoicing process on any accounting software you're using features automated payment reminders.

 

That said, before you let your accounting system send out any emails, ensure that the language used on your automated payment reminders reads as if it's coming from a grateful supplier rather than a robot.