Invoicing and getting paid on time—these are two of the toughest challenges that every business faces every now and then. Late payments can affect your cash flow and in turn impact such things as your bill payment, your production, and more.
Therefore, you should take measures to ensure that you won’t have trouble with invoicing and that you get paid on time. Here are some tips from your trusted factoring company:
Watch Clients’ Payment Behavior
There are clients that start things on the right foot, paying their bills on time, then as time passes by their payments start coming late until you find your business getting affected by their tardiness. It is for this reason that you should always keep an eye on the payment behavior of your clients. Don’t just let things slide all the time. If necessary, consider reevaluating the terms if that would make it easier for the client to pay on time.
Set Clear Policies
From the very beginning, you should set your policies on things like collection and credit limits. Have those specified in your documents and check with your lawyer to determine if having those in the contract can help your business.
Get Deposits Whenever Possible
When your business is growing, you can expect customers to also get larger orders. However, you should always be on the safe side. Make sure that you secure a down payment first whenever a client orders a larger quantity when the client has a less than stellar credit history, or if it’s their first time ordering from you.
Send Invoices on Time
If you don’t send out invoices early, you run the risk of getting paid late. You might want to consider automating your invoices if they’re for a fixed amount. Always remember that the sooner your clients know how much they owe, the better they can prepare for it and the sooner you’ll get paid, too.