11 BILLING RULES TO INCREASE ACCOUNTS RECEIVABLE PAYMENTS

11 BILLING RULES TO INCREASE ACCOUNTS RECEIVABLE PAYMENTS

Billing customers may seem like a simple task. Send an invoice and wait for your money to come in. So why is it taking so long every time? It may not simply be problems on your customer’s end, but little mistakes you’re making along the way in the billing process. These can be mistakes that seem insignificant, such as forgetting to put your company’s address on an invoice or opting out on using your “P’s” and “Q’s”.

These 11 tips on billing customers are common mistakes, so don’t think you’re the only one if you’ve skipped a step or two. Following these basic and simple rules for billing can decrease your wait time on receiving payment.

SIGN A CONTRACT

If only we could rely on a handshake for a customer to make good on their word! Unfortunately, that doesn’t seem to happen too often. Writing up a contract can ensure that your customer is fully aware of payment expectations. Even writing up a simple contract that includes due dates and a signature from the customer can do a world of good. This way, the customer has an extra feeling of obligation and you have a method of recourse if they don’t pay up.

ESTABLISH PAYMENT TERMS

Beyond signing a contract, be sure to fully outline a payment policy for your customer. This can include due dates, what will happen if the payment is past due and when you have the right to send the invoice to a collection agency. By spelling out these terms for your customer, no excuses can be made on their end for why they didn’t pay on time.

WRITE OUT THE DETAILS

Detailing everything will add a bit of professionalism to your work, as well as help your customer out as well. Spelling out on the invoice exactly what you are charging them for will help to eliminate disputes, helping you get paid faster. Furthermore, addressing it exactly to the person that should be receiving it, instead of generally to the company, will get the invoice into the right hands. If the invoice is being passed on from person to person, you’ll be waiting even longer and potentially not getting paid at all.

INVOICE IMMEDIATELY

As soon as the work is completed, invoice the customer. The longer you wait, the easier it is for the customer to push the payment to the back of their minds. It also sends a signal to the customer that getting paid isn’t time sensitive for your business. Studies have showed that invoicing the day a job is completed increase your chance of getting paid 1.5 times.

DOUBLE-CHECK EVERYTHING

Be sure that the numbers and information on your invoice are correct. If a client has to send an invoice back to you to correct information, you’re setting yourself up to wait longer to collect on payments. Be sure that the payment amount, down to the cent, is correct, include the right business name, address and bank account.

CHARGE INTEREST

Including interest fees in your payment policy will give your customers the extra “oomf” to pay on time. If they have to pay a small fee every day their payment is late, they’ll be sure to pay on time. This is especially important if you have a customer who tends to be a chronic late payer. Be sure that you make your interest fees clear up front and not sneaking them up on the customer once the late payment happens.

MANAGE CASH FLOW

It’s important to have which bills have been sent, paid and pending straight. Using an accounts receivable software can help you keep clear where you are at with each customer. Furthermore, an accounts receivable software can automate collections emails for you, saving a lot of time to focus on other important business tasks.

INCLUDE INCENTIVES

Offer a discount to customers who pay ahead of time, or even on time. This option best works with smaller businesses who can really benefit from receiving a small discount.

FOLLOW-UP

Keep track of who has paid and who hasn’t. This is where accounts receivable software comes in handy again. The software can flag customers for you who are past due on their payments, so you don’t forget. Send out a friendly reminder as soon as that invoice goes past due, which you can program your accounts receivable software to do automatically.

GIVE DIFFERENT PAYMENT OPTIONS

Most businesses these days prefer to pay online. Give your customer the option of paying via credit card, ACH or paper check. To make the deal even better for you, make paying electronically much easier for the customer by providing links and quick access to a payment portal. You will get paid much faster online.

MIND YOUR “P’S” AND “Q’S”

Simply being friendly and non-aggressive when it comes to asking for payment can go a long way. The more combative an invoice sounds, the less likely the customer will want to pay it. Add in an extra “Please pay your invoice by…” or “Thank you for your business”.

Following these simple steps will help your business get paid faster. Most of them seem like common sense, and you may already by implementing a few of them, but using all these tools together, including an accounts receivable software, will decrease your days waiting to get paid.

17 TIPS FOR REDUCING OUTSTANDING ACCOUNTS RECEIVABLE

Want more accounts receivable tips?
Check out our most popular guide here.

NOT A MEMBER?

Sign up today to become an instant member and start learning how to get PAID FASTER!

SIGN UP

CATEGORIES

MOST VIEWED
© Copyright 2018 e2b teknologies, Inc.