Managing cash flow is so important in business, which is why unpaid invoices are such a huge problem. If you have a lot of customers that are not paying up on time, that will soon lead to cash flow issues and it could mean the end of your business if you are not careful. All businesses deal with a few tricky clients at some point, but if it is becoming a regular occurrence, you need to do something about it. The good news is, there are some simple ways that you can get your customers to pay up on time. These are some of the best ways to avoid unpaid invoices and improve your cash flow.
Provide Clear Invoices
If a customer doesn’t want to pay up, they will try all sorts of tricks to avoid the invoice. They may say that they didn’t know that the invoice was due or they might challenge some of the items on the bill to delay payment and try to get a discount. You can avoid that by writing a detailed and clear invoice that breaks down exactly what they are paying for and when the invoice is due. It’s also important that you keep a clear paper trail when negotiating the price and sending them quotes so they cannot claim that the invoice is higher than agreed.
Consider Recurring Payments
If you have clients that use your services on a regular basis, consider asking them to set up a direct debit for recurring payments rather than issuing a new invoice every month. It makes life easier for you and for the customer and if you use recurring billing software, it’s simple to manage. You can make the prospect more attractive to customers if you offer them a small discount in exchange for making recurring payments every month. This gives you a good steady income, which makes managing your cash flow a lot easier.
Build Good Relationships With Customers
If your customers like you, they’ll be more willing to pay up on time, but if you don’t have a good relationship with you then they will be far more likely to leave invoices unpaid. It’s important that you build good relationships with your customers from the outset, and if you do, you will find that you don’t have an issue with unpaid invoices.
Don’t Be Afraid To Chase People Up
Sometimes, business owners are afraid to chase people up because they don’t want to damage their relationship with customers. However, if you allow people to get away with paying invoices late, they will take advantage of you and the problem will only get worse. It’s best to be clear from the beginning and if people have not paid, call them up and ask them where the money is. In most cases, people will pay up and if they decide that they don’t want to work with you again in the future, you just have to accept that and consider it a win because you don’t have to deal with a tricky customer anymore.
Follow these steps and you should be able to avoid any unpaid invoices in the future.