Get Serious About Getting Paid: Why Weekly Follow-up Matters
When you run a small business, past due payments can slow your cash flow to a trickle. Stale invoices and late customer payments may make it difficult to pay employees, vendors and suppliers. No business owner looks forward to collecting late payments. Reminding clients that they’re late on their invoices is a tedious and oftentimes awkward task. Business owners walk a thin line. They respectfully request immediate payment while also trying to avoid conflicts that damage business relationships. Charging a late fee or cutting off products or service delivery puts all parties in an uncomfortable, unfortunate business situation.
To get paid faster and avoid business conflicts, business owners need a few accounts receivable strategies. One strategy that works for Prosperity Bookkeeping is to follow up with payers every week. It is perfectly acceptable to send friendly reminders to clients to ask about their invoices. Reminders aren’t just for overdue or late payments. On the contrary, reminders work great as notices that a deadline is approaching.
Technology makes it easy to schedule automatic reminders, so the accounts receivable team doesn’t spend a lot of time with this task. An automated reminder sent from an invoicing system like QuickBooks typically doesn’t come across as too pushy or too personal. Instead, automated reminders seem more like routine and helpful administrative notices. Automated payment reminders sent in an email or text message are proven to be effective to get payments in on time. Learn more about customer payments in my article, Are You Being Deceived? How Much Do Your Customers Really Owe You?
When I managed accounts payable for a construction company, cash flow was often a challenge. I had a method for figuring out which bills needed to be paid right away and which ones could be put off. The ones that got put off were to the vendors that never followed up on open invoices, or they did so inconsistently. Since they gave me the least amount of trouble, they were the easiest to push off. The ones who were constantly reminding me that the company was past due were the ones I tended to expedite. Basically, the consistent reminders created discomfort, and discomfort moves humans to action.
In addition to the apps that automate the follow-up process, outsourcing payment management is another alternative. Outsourcing is especially advantageous for busy business owners trying to juggle too many hats. Thinking about outsourcing payment managing or bookkeeping? Here are 12 questions to ask.
If your small business tends to let their customers' open invoices slide, it’s time to make a change. To improve cash flow, get into the habit of staying on top of invoices weekly. The key here is timely and consistent follow-up, so customers know you are serious about getting paid. Contact Prosperity Bookkeeping for more business finance tips and professional, dependable bookkeeping services.