Poor cash-flow management and planning is one of the main reasons a lot of small businesses fail. As well as knowing exactly what’s going out of your company each day, week and month it is vitally important you plan for what and when money is coming in.

One such way is by your company using invoices to ensure payment from clients. This should provide a clear calendar of when your business is set to receive such payments. Problems often occur but there are a few ways to improve your invoicing process.

Create Accurate Invoices

A receipt is evidence of payment whereas an invoice is a legal bill required when selling a product or service between two VAT registered parties. To avoid payments being held up the customer must accurately fill out an invoice but it’s up to your business to provide a clear and correct one in the first place.

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This must include a unique identification number, your company’s and the customer’s name and address, dates of the invoice and when goods were supplied, description of what’s being charged for and how much. The account being paid and an agreed payment date aren’t necessary but are helpful. The easier it is to fill out, the quicker a customer is likely to pay.

Enforce Good Timekeeping

Creating an invoice that stands out isn’t going to get it paid any sooner. Instead building up a trustworthy relationship between your business and clients is the best way to work towards this. Ring up to remind them rather than sending emails which are easily ignored, even before a payment has been missed.

There’s also an onus on your company to get the invoices sent out as quickly as possible. Enforce short payment terms which are clearly stated on each invoice to avoid waiting 30 days and still not being paid. Include overdue fees in interest if deadlines are missed.

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Use Helpful Services

It can be difficult for new businesses to get the cash-flow balance right at the start of their life. Plenty of time is spent waiting for payments before reinvestment can be made to help further the company.

Invoice factoring services from places like Touch Financial is incredibly helpful in such circumstances. They will supply your business with a percentage of each invoice 24 hours after sending it to your client, giving you far quicker access to more cash. The lender later collects the rest of the invoice and returns it minus the agreed fees.

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