6 WAYS TO TAKE YOUR SMALL BUSINESS ACCOUNTS RECEIVABLE TO THE NEXT LEVEL

6 WAYS TO TAKE YOUR SMALL BUSINESS ACCOUNTS RECEIVABLE TO THE NEXT LEVEL

Small businesses tend to have the most difficult time getting customers to pay their invoices on time. With a small team of accounts receivable professionals to manage the invoices, the workload tends to get overwhelming. There doesn’t seem to be enough time to reach out to every customer and, as customers go longer and longer without paying, it could end up causing harm to your business. However, there are a few ways you can get proactive in your accounts receivable to mitigate the overwhelming workload, as well as collect more quickly and efficiently.

These 6 quick tips will take your small business accounts receivable to the next level.

SEND INVOICES EARLY

If you’re batching invoices to customers once a month, or even once every two weeks, there are likely customers that are missing a bill up to 14 days past the day the product or service was delivered. Once they’ve received the invoice, they then will have their NET 30 days to make a payment. That’s a long time for you to wait, almost 45 days, to finally receive a payment. You should be invoicing as soon as the work is completed. Instead of waiting to do all the invoices at once, do the invoices as soon as possible to ensure you’re getting paid as soon as possible.

ITEMIZE YOUR INVOICES

Each invoice you send out should have a clear indication of every charge they are receiving and why. If there is just a dollar amount, it’s likely that your customers will end up disputing the invoice, tacking on extra time it will take you to get paid. Many companies cannot make a payment on an invoice if it is not itemized, as well as if a purchase order is not attached. Make sure that all the information and documentation is included with your invoices, so it’s easy for them to pay immediately.

MAKE PAYMENT DATES CLEAR

Not only should the due date of the invoice be made clear on the invoice, but it should be discussed and included at the point of sale. Make sure that your customers are aware of your terms before the product or service is purchased and that they are signing a contract to follow your payment terms. Your customers should be made aware of the payment due date as many times as possible, so there is no ambiguity or confusion over when you need to received payment.

INVOICE OFTEN

If your customer continually orders from you, don’t wait to hand them one large bill. After every product or service is delivered, give them an individual invoice. It’s much more daunting to receive a large bill and much more likely for them to put off paying it when they feel they have the cash flow to do so. If you’re able to, send them smaller invoices over time that they can pay you for quickly. By doing this, you’re also protecting yourself from losing out on one large sum of money if the company never pays you.

MAINTAIN A RELATIONSHIP WITH YOUR CUSTOMERS

It’s much easier to get a customer to pay you, especially if they’re hitting tough times with cash flow, if you have a good relationship with the customer. Check in with them every so often to see how they’re doing. Send them a personalized thank you email after they’ve made a payment on their invoices. Get to know the accounts payable team and ask them about their family, send them a birthday card or a gift on the anniversary of when you started doing business together. These small gestures will pay off when they choose to continue doing business with you and keep you on the top of their list of invoice to get paid.

TAKE ADVANTAGE OF AUTOMATION

Using an automated accounts receivable tool to manage your small business collections efforts takes the manual work out of the job. Invoices are created automatically and email reminders are sent out without any effort by your team. Customers are able to pay online, taking out the wait time of getting a check in the mail. This leaves more time for your team to do things like build customer relationships, follow up with phone calls and managing disputes.

17 TIPS FOR REDUCING OUTSTANDING ACCOUNTS RECEIVABLE

Want even more tips to help you get paid on time — or even early?
Read our ultimate guide to reducing outstanding accounts receivable.

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