Today we're going to expand on a subject that is close to our hearts here at InvoiceSherpa, getting your invoices paid faster. As a hard working person you deserve to get paid and your customers actually do really want to pay you. But regardless of whether your challenge is getting paid faster or at all, we're here to drop some tips on how to make this a bit easier.
Today we'll discuss a strategy that is really the bed rock for success in accounts receivable. The early follow up. Now how early you might ask? Actually only a few days after you send the invoice. A few days!?! Bear with us, after a few days the best strategy to make sure you'r going to get paid on time is a quick and helpful confirmation call to your client that they received the invoice. This call is really about two items:
- Did they get the invoice? Just that simple, a lot of the time clients will say they did not.
- If they got it, do they have any questions or concerns about it?
These two simple questions can mean the difference between a timely payment and a "Oh we never got that invoice?" when you finally do call and the invoice is past due. This first invoice reminder call is a critical tool to help you get paid.
Imagine what happens if you don't make this call and instead simply send the invoice with the assumption of payment being sent on time. If either of the points above aren't true you can quickly find yourself many days past the due date and you still without the cash on that invoice in your bank account.
Now you might be type of business that can sustain such routine events, but can't yourself in the minority as most businesses live and die by their cash flow each month as they have bills to pay both professional and personal. Missing payroll because a client failed to pay on time is a big deal and can strike a blow to moral that might never be recovered. Or maybe you might then have to delay payment to an important vendor who will wonder if they now have a deadbeat client on their hands.
Anyway you look at it, not getting paid on time is bad news for your reputation. Never mind the fact that when a client has your money past the time you expect them to it instantly becomes a free loan that they can now use to grow their business, pay their expenses, and use for their profit. At current interest rates that is a very expensive loan and one you get no interest on.
The reality is on any one invoice not getting paid on time can be no big deal, this is really a cumulative picture and this is where most businesses miss the boat and end up going under due to "cash flow problems". Basically if you have this problem happen on one too many invoices it becomes like a pile up on the freeway, each subsequent invoice slams right into the one in front of it until the books are a mess and your bank account is empty with vendors banging down the door for payment. Trust us, not a pretty picture for any business.
So next time you want to improve your cash flow and get paid faster, pick up the phone and make that confirmation phone call a few days after the invoice is sent to be sure your clients are happy with it and plan to pay you on time, your bank account will thank you!