As a business, it is important to stay on top of its cashflow and one very important aspect is to ensure that its invoices are getting paid in a timely manner by its customers. Here are some tips to get paid on time:

1. Ensure that invoices are sent regularly. You don't need to wait till the end of the month to send the invoice. As soon as the software is sold, job is done, the invoice can be sent.

2. Ensure that the invoice goes the right person. This is particularly important when dealing with a large customer. The buyer is not necessarily the person receiving the invoice. Make sure you find out what the customer's invoice approval / payment process is.

3. Ensure that your invoice is correct. For consulting work, you may want to separate out invoices if you have multiple consultants or expenses as one little issue could hold up an entire invoice.

4. Make sure you have your ABN number and the invoice has the correct GST value.

5. Payment Terms - always try and negotiate for the best terms for your business. Some tricks that larger customers use is to say it's X days from date of receipt. You will want to negotiate for X days from date of issue. The difference could be a week in some cases.

6. Offer early settlement or discounts to the customer. This doesn't have to be anything significant but it gives customers an incentive to pay on time.

7. Where appropriate, do not start any new work until existing invoices are handled. This should be handled delicately as it could strain your relationship with the customer but it is an option so use it wisely.

8. Follow up! your invoice is one of many hundreds and thousands that the customer may receive so it is 100% of your problem and 1% of theirs therefore it is in your interest to chase it up. Nobody is going to do it for you.

 

What tips do other readers use to manage their debtors?