Your business needs income to survive, and it can be difficult waiting for payments to come in when you need to keep the lights on and the doors open. Luckily, managing receivables can be easy if you follow some of these tips.
Offer Discounts
Everyone likes saving money, so why not capitalize on this by offering your customers a discount when they pay? You can offer discounts to customers who pay their bill early to incentivize them to pay their bill on time. Or, you can even offer a discount to customers who enroll in automatic payments. This ensures you’ll have a steady income each month and will eliminate the need to send them a bill, which will save you money on paper and postage.
Use Efficient Invoicing
Sometimes customers don’t pay a bill because they simply forget. Life gets busy and if you wait too long to send a bill, they may forget they even purchased your product or service. That’s why it’s important to use efficient invoicing and ensure prompt delivery. It not only keeps you fresh in their mind, but it sets you apart as a professional, thorough business.
Make Paying Easy
Most people run their lives digitally now, and you may want to anticipate that when you’re managing receivables. If the only way a customer can make a payment is with a check through the mail, chances are you will have a lot of delinquent payments. People like having options, so give them multiple ways to pay their bill and be sure to capitalize on different preferences. More traditional customers may be ok with sending a check through the mail while the tech savvy tend to prefer online or over the phone. The easier it is to pay you, the more likely you’ll receive your money on time.
Use Stricter Credit Requirements
Most businesses offer credit to customers, especially those who are making a large purchase and may not have the money up front. But before you hand out that new credit card, ask your customer to fill out a credit application. You’re essentially giving out a good or service on the faith that they’ll pay you back for it over time, and you don’t want to extend that privilege to just anyone. Be careful who you give credit to and don’t be afraid to have strict credit requirements. It’s better to know your extending credit to someone who can pay you back in a timely manner than to end up taking a loss.
Managing receivables can be a headache if you don’t have a proper plan in place, but using these tips you should find that having a steady cash flow is a breeze.