2008
Oct 2

Invoices

 
In this economy, you will inevitably notice a slowdown in your receivables.  Of course the timing couldn’t be worse because you need to maintain a healthy cashflow for the business.  Many of you might be looking for some techniques to speed up those incoming checks.  Here are some proven techniques you might be able to deploy.
 
 
( First Things First )
 
First, make sure your invoice is not at the bottom of the pile because you are so “nice.”  In this economy, the nice guy gets paid last.
 
1)  Firm up your contracts.  Now is not the time to be too casual when it comes to sales & service agreements.
 
2)  Avoid taking verbal sales & service requests–within reason.
 
3)  Include firm timetables for payment due dates and exercise your contractual right to collect late fees if necessary.
 
 
( Give Them Payment Options )
 
1)  Accept credit cards.  Yes, you’ll have to pay the 3% fee but depending on your cashflow needs, it might be a small cost of doing business.
 
2)  Be open to arranging payment plans with your troubled customers.  Remember that a “bird in the hand”… you know how the saying goes.
 
3)  Offer your own financing plan and collect a moderate interest or financing fee in the process.
 
4)  Try sending invoices via e-mail to speed up the process and offer them an online payment page.
 
 
( Incentive Collecting )
 
1)  Give them discounts for paying fast.  Let’s say an invoice is due in 30 days.  Give them a small discount if they pay within 10 days.  This is kind of an early bird special except it is being used on your invoices.
 
2)  Use their request for new services as a reason to bring the account balance to zero.  In some cases, you will have to hold firm against offering new services until they pay.  This situation gives them an incentive to pay now.  Every customer is different so only you can determine if “holding the line” is right in a particular scenario.
 
3)  Create a points system like the credit card companies.  The more they pay on time, the more points they accrue for rewards, discounts and other incentives.  Do you love your AMEX points?  This is the same concept except you’re creating your own program.  Even little juice shops run these types of plans.  Did you ever receive one of those cards you got hole-punched every time you made a purchase in the hopes of one day earning that elusive free item?  It’s funny how we LOVE free stuff.
 
 
Give some of these techniques a try.  Remember, it’s not about whether you’re going to get paid or not.  It’s an issue of when.  Where are you in the invoice line?
 
 
 

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