5 Things You Should To Do To Ensure You Get Paid On Time


Some business owners manage cash flow beautifully, and some plod along and seem to get through. If you proactively work on getting your cash flow system working for you, it can reap rewards. Here are a number of ideas you can quickly implement in your business, with 5 things you should do to ensure you get paid on time:

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1. Have a System

It's the foundation of good cash flow management. Many systems are now cloud based which in truth are more useful often than having it on a pc in your office or on word documents and spreadsheets. Ensure the system you choose is the right one for you and your business. At a minimum it should invoice for you, manage purchases, and give you good reporting function.

2. Be Firm

The more lenient on Debtors you are, the more they will think you don't mind extending credit. Make sure you have payment terms on all invoices. Be kind, professional but firm with collection.

Recommended reading: Tips for Getting Paid On Time

3. Credit should not be assumed

Remember, if you don't have payment terms then Debtors will take as many debtor days as they can to get paid. Make sure you can easily invoice, and send out your statements at the start of each month. If you are putting in phone calls, have a system. Do it consistently each week/month. If one of your clients were to get a loan, they would be charged interest. If you are giving 60/120/180 days to pay, it's free credit!

4. Follow up

If the promise of payment is made then check it over the next 3 days and if it is not made, follow up immediately.

5. Make Notes

Your bookkeeping system (cloud or not) should have the facility to make notes. Make these notes on conversations you have had with clients on collection of monies. Refer to previous conversations when following up multiple times.

Finally, it's important to remember that many businesses may be competing for a client's money. The business who has implemented the best system gets paid first, and will ultimately manage cash flow with success.

Recommended reading: 7 Tips for Better Invoicing for Start Ups

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Thursday, 14 November 2019
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