Learn tips from Xero for "Getting paid on time!"
Small businesses are holding an obscene amount of unpaid invoices. These outstanding payments put loads of pressure on cashflow and can cause unnecessary stress. As a small business owner, the last thing you want to have to do is chase payment. You want dollars in your pockets ASAP. But there’s a lot to keep track of, especially as you gain more clients and customers. Fortunately, there are tools and tips available to help you stay on top of all your invoices.
Hey everyone! I’m Sarah and I’m a member of the Marketing team at Xero and the co-producer of our small business podcast, Xero Gravity. The podcast explores a variety of small business challenges like accessing capital, modern marketing tactics, how technology transforms the way you do business and much more.
I’m excited to share some notes from what we’ve learned through Xero community surveys and podcast conversations on how to get paid faster. During the next 60 minutes, I’ll be posting insights in three parts and will be here to answer your questions. Please post your questions below (don’t forget to login). If you’ve never had a problem with getting paid on time and can shed light on your experiences, we’d love to hear from you!
Part I: The four most challenging aspects of invoicing
Invoicing can have a lot of moving parts. Managing interactions with current and future customers, and understanding other opportunities to grow sales takes a ton of time and effort. First, let’s outline some common roadblocks. Our online business community members share the biggest challenges they’ve faced with invoicing:
Sending timely invoices and following up on overdue invoices
These seem to be the most common problems. If you’re not using cloud accounting or CRM software to manage these tasks automatically, taking the time to send and follow up on invoices can be a hassle. Accounting software can also help with automatic alerts, reminders and notifications.
Dividing payments across multiple invoices
Account reconciliation isn’t always straightforward. Be sure your clients are including invoice numbers as a reference for every payment made.
Making sure all completed work is invoiced accurately
Effective communication is critical here. Be sure your team is trained to work closely with your accountant or financial consultant to secure proper invoicing. What may also be helpful here is time tracking software, especially if there are multiple people working on a client account. Be thorough with your invoices. If you let certain “minor” services fall through the cracks, your customers will expect the same treatment when they return.
Ensuring invoices don’t get skipped over
Again, communication plays an important role. Build a good working relationship with your client’s accounts department to make invoicing a smooth process. You can also design your invoices to make them pop. Plus, you can treat every invoice like a branding opportunity – a good design and company logo can go a long way.
Part II: Recommendations for getting an invoice paid
Sending an invoice is only the first step in getting paid. Not every customer is going to be eager to pay on time. The online community we surveyed had some ideas to make things easier:
Charge a late payment fee
In most countries, you’re entitled to charge overdue fees as a form of interest if you’ve clearly laid out your invoice payment terms. If you do end up taking this step, be ready for enthusiastic feedback from your clients.
Communicate with your clients
Yes, again. Effective communication is a critical part in maintaining client relationships. Sending reminders can be helpful, but if your client’s accounts team doesn’t know who you are or what business you have with them, it’s easy to ignore these alerts. Do the old-school thing and pick up the phone from time to time. It’s a much more human approach and way more effective at building positive connections..
Make your payment terms short
Kind of speaks for itself, right? The longer you allow your payment terms to be, the longer it might take to get paid.
Part III: How to get paid faster
Confirm payment dates and amounts with your customers in advance. Better yet, save yourself some hours and automate invoices. What’s even cooler is that Insightly integrates with Xero so you can keep track of your invoices and customer communications. Not only will you be able to see current invoices, but also client history.
Your invoices and bills live in Xero while your prospect, customer and partner information live in Insightly. With the Insightly Xero integration, you get a complete picture of your business – from early prospect communications to the sales process to invoicing and payments. You can also create Xero invoices directly in Insightly.
So, if you want to get paid faster, remember these points:
- Set the pace by sending invoices on time, and be diligent with following up. (Hint: Helpful accounting software can do this for you automatically. How easy!)
- Communicate frequently with your staff and clients’ accounts teams to ensure invoices are accurate, delivered on time, and paid on time.
- Put strict guidelines in place, like payment terms and late fees, to ensure timely delivery of payments.
- Automate everything and keep track of all your client invoices on one easy-to-use dashboard.
Spend more time doing what you love
Should you give up, or should you just keep chasing payments…
...Okay, all pop culture references aside, it’s no fun chasing debtors. No one has time for that. Yet, it’s something you can’t avoid if you want to get paid.
It’s all about organization, communication, automation. Take control of your small business and your life with helpful software, and spend more time doing what you love.
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