We live in an unfair world. It sometimes rains on birthday parties, your car will inevitably stop making that annoying squeaking noise as soon as you pull up to the mechanic shop and, if you’re a small business owner, your invoices will often go unpaid.
According to one report, the amount of unpaid invoices for America’s small businesses totals $825 billion. Yikes. That’s equivalent to about five percent of our country’s GDP. And it means that, on average, every small business has more than $80,000 in unpaid invoices.
If you don’t want to be one of these stark statistics, it’s time to improve your invoicing process. Here are some helpful tips for getting your invoices firing on all cylinders.
You’ve got a lot on your plate, so it’s a bit much to expect you to remember what invoices are due and when. How about letting some specialized software handle it? Those who owe you money will always receive the right invoice at the right time, freeing you up to focus on other aspects of your business.
If you already accept credit card payments, good for you. If you don’t, you’re probably missing out on sales and invoice payments. According to a Gallup poll, more than 75 percent of Americans use credit cards. So you’ll expand your business opportunities and get faster invoice payments by taking credit cards.
If you want consistent results, you’ve got to provide consistent terms. Make them easy to understand and free of surprises. Your partners and customers will appreciate the clarity and you’ll be able to build solid relationships of trust with them. A good rule of thumb is that the clearer you make the consequences for missing a payment deadline, the less likely it is that you’ll need to enforce them.
There are certain situations where shorter payment terms will work for both parties. If there’s already an established relationship, you can simplify the payment process for everyone by setting shorter payment terms. You’ll get your money faster and they get the payment off their to-do list faster.
Chances are, you already use reminders for other aspects of your life. Like when to pay the rent, pick up your kids, change the filter in the furnace or celebrate your anniversary. Your customers and partners are no different. Do them a favor, and yourself as well, by having your invoicing software automatically send reminders. Once programmed, it’s one less thing you need to worry about. And the result of regular reminders is often extra cash in your pocket.
Even with the best invoicing system and the most helpful reminders, issues will arise from time to time. As long as you’re proactive in your communication and consistent in your actions, resolutions will be faster and easier to come by.