Small Business Thoughts: How to Get Paid Faster and Have Healthy Business Finances

A smooth inflow of revenue is crucial to the success of any business. But, as reported by CBS Insights, a staggering 38% of businesses close down as they run out of funds. As the owner, it is important to have a reliable system in place allowing your business to have a predictable cash flow. 

2nd Life Media CEO, Author and business coach Chris Edwards offers some guidance on how to establish these systems and ensure you are always paid on time.

Set Clear Deadlines

When entering into a contract with clients, convey your payment expectations in clear terms. Additionally, include it in your contract and mention clear due dates on each invoice. Never let your payment deadlines be ambiguous and learn to be firm about payments.

Share Invoices Immediately

There is no good reason to wait for sending an invoice after you have provided your service. Make it a habit to share the invoice immediately on completion. If possible, you can instruct your employees to carry physical invoices and collect payment in person. Similarly, you can automate your invoices so that the customer receives them as soon as the service is updated as complete in your system.

Provide an Installment System

Rather than sending one invoice of a large amount, opt to send multiple of smaller amounts. This makes it easier for clients to pay and ensure you receive money at frequent intervals. Additionally, new clients may show skepticism towards paying a large amount upfront. In this scenario, you can introduce a milestone-based system, where you are paid on completion of 25%, 50%, and 100% of work completed. This will help you land more clients than businesses that do not provide such alternatives.

Itemize Every Charge

Never send an invoice with only the total amount. Break down every charge individually, which can include labor costs, transportation, shipping, packaging, tax, and more. This will reduce the probability of disputes from the customer’s end and ensure there are no reasons to not pay the bill on time.

Additionally, for long-term customers or those with good payment history, you can also provide discounts and mention those clearly on the invoice, helping you improve rapport. 

Increase Payment Options

As reported by GoDaddy, In addition to traditional modes of payment such as cash, cheques, and cards, incorporate new methods such as payment apps (PayPal, Venmo, etc.), online bank payments, and even cryptocurrencies if you have a strong understanding of its workings. The idea is to give the customer no excuse not to make payment by providing the highest level of convenience possible. 

Follow Up Promptly

Do not wait for weeks to pass before you start sending reminders for payments. Send a follow-up a day after the payment was due. This can include a gentle reminder of the service completion date and the due amount. Sometimes delays can happen due to confusion regarding due dates or the client unintentionally being forgetful about the payment. As the owner, it is your responsibility to follow up and enforce agreed-upon due dates.

For clients who are notorious for paying late, stop providing services until all due payment is made. Additionally, you can also seek the help of collection agencies.

Invest in an Accounting Software

Receiving payments on time is one part of the story, the other part includes efficiently handling funds and making informed financial decisions. To achieve this, it’s important to invest inpurchasing accounting software, which will provide you with the following benefits:

● Automation of Tasks: Whether it be sending invoices, sharing payment reminders, or creating journal entries for transactions, you can automate these tasks and never worry about missing a follow-up or wrong entries.

● Improved Accuracy: In a few simple steps, you will be able to create complex financial statements such as balance sheets, cash flow statements, etc. Additionally, the software will automatically highlight errors if there are any.

When choosing software, look for ones that provide the option of integrating Plaid’s API to get bank transactions information, as it provides 100% security for payment data and allows you access to transaction data as far back as 24 months.

The key to being paid on time is to set clear deadlines, make it easy for clients to pay, and track all transactions using reliable accounting software. 

Story written by  Cheryl Conklin who created Wellness Central from her desire to share various resources and her thoughts on wellness. Apart 
from blogging, she enjoys traveling and going on endless adventures, and writing about her experiences at the end of the day.


SIGN UP! Business Exclusive: Sam Marcum Teaches Us: What’s Getting in the Way of Your Leadership Potential?

Sam Marcum Teaches Us: What’s Getting in the Way of Your Leadership Potential?

It’s important for business owners and community leaders to access their full potential, if they are going to achieve their goals and have a positive influence on those around them. Sometimes what’s keeping you back may be external circumstances. Other times, however, the biggest obstacle to success may be your own patterns of thinking or behavior that are counterproductive. Ready to find out more? Author, coach and political consultant Chris Edwards invites you to read on.

How self-aware are you?

Before you can evaluate whether you are holding yourself back from leadership success, ask yourself this: How much self-awareness do you really have? Are you willing to look objectively at your own attitudes and actions, and evaluate them, even if it means accepting that you may need to grow and change? Good leaders are able to do this. Poor leaders, on the other hand, prefer to hold on to whatever fantasy visions they have of themselves than do the work of self-improvement. So self-awareness is the first step toward better leadership. Without an accurate picture of yourself, you won’t be able to assess whether you’ve been self-sabotaging your leadership in any of these common ways detailed below.

How coachable are you?

Good leaders not only give direction; they are capable of receiving it, as well — and not only from those in positions of authority. Being able to listen and even accept criticism from those you outrank and oversee is also crucial. Business owners who are unable to take advice from others, or will only take advice from a select few, are less likely to learn, grow, and improve over time. They may even find themselves repeating the same errors over and over again because they were unwilling to listen to those bringing constructive criticism to the table.

How dedicated are you?

It’s easy to get excited about the idea of running a business or overseeing a major project, but then reality sets in — and reality means work. It means attention to detail, even when the details are boring. A business owner who is hoping to leap straight into a life of leisure with a constant stream of passive income is setting themselves up for failure. That time may come, but only after you’ve worked to achieve it. A good leader needs to be dedicated to their business and their team, not only in terms of enthusiasm but in actual day-to-day action. To truly understand what it takes to manage a business inside and out, going back to school for a business degree or even an MBA can truly put you in the driver’s seat. And these days, you can attend online programs that don’t get in the way of your business responsibilities.

How empathetic are you?

Don’t make the mistake of thinking that good leadership is all about being aggressive and authoritarian. Yes, a few successful business owners operate this way, but for the most part, pushy and demanding bosses tend not to get respect. Their employees and collaborators will neither enjoy working with them nor be willing to invest in their dreams. By contrast, leaders who demonstrate empathy and who respect the feelings of those they interact with earn loyalty. Empathetic leaders are better equipped to see where their team members are coming from, to help them problem-solve and figure out how to keep them motivated.

How practical are you?

It’s great to be a big-picture person. But visionaries need to be practical, as well, if their big picture is ever going to be more than an appealing dream. Good leaders don’t neglect their bureaucratic and legal responsibilities. If you are a business owner, that means attending to such details as getting the right licenses and permits and purchasing the right insurance. If keeping up with all the legal details is getting overwhelming, don’t feel you have to multitask — hire a personal assistant to help you or a freelance professional specially trained in this area of expertise.

You don’t want to sell yourself short by neglecting to develop the leadership skills that will really allow you to soar. Take advantage of training and mentorship programs, when possible.

Image via Pixabay

Guest Article Written by: Sam Marcum created which aims to help organizations thoroughly-articulate their benefits with brief, engaging multimedia material and genuine thorough reviews of health insurance companies.