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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.

[Play Video]

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.

https://www.insightly.com/integrations/xero/

 

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.

Sign up for a free trial today.

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Comments

33 comments
  • Hi Sarah,

    I am unable to attend the webinar though I have a question - What is a reasonable amount of time to get paid? My recievables vary from client to client. I wait 30 days before reaching out to find out the staus of payment. Typically, one call and the cheque arrives shortly after.

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  • You just did! This is not a webinar...the discussion  happens through these posts. You will now be notified of all comments.

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  • We have clients all over the world and sometime some of those organisations paying us in the UK. I was wondering what techniques would make getting paid easier. We currently use Xero and send invoices with our bank details and a credit card link to be paid via Stripe. However credit card payments become very expensive and many organisations seem incapable of paying by wire transfer to an organisation in another country. Any innovative thoughts or techniques?

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  • Hi Brian!

    It looks like Melissa was able to address your comment about this online discussion. Tomorrow we'll be posting all of Sarah's tips for "Getting Paid on Time". Hope you can join us! If not, feel free to leave a question in this comments section for Sarah to answer. Thanks!

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  • Hi everyone! Excited to be sharing tips today on invoicing and getting paid faster. We'll be starting in just a few minutes. 

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  • Thanks, Sarah! So great to have you here!

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  • Hi everyone,

    Thank you for joining us today! Part I of Sarah's 3-part discussion has just been posted and Sarah is here with us, LIVE to take your questions. If you have any billing tips or tricks, please post them in the comments area. We'd love to have you share them with us! 

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  • Hi Melissa, 

    Thanks for your question. It certainly varies depending on the industry, and what kinds of goods/services are provided. But generally, it's common practice to send invoice reminders 7, 15, or 30 days after an invoice has been sent. 

    Thanks!

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  • Can you share some of the best practices your Xero community members have offered for following up on overdue invoices?

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  • Interesting...I guess I was being a bit too patient waiting 30 days...Thanks Sarah.

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  • Hi Sarah,

    I'm piggybacking on Thomas' comment. :) Starting any conversation on way overdue invoices can be uncomfortable! Do you have any tips on what to say?

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  • Hi David,

    Thanks for your question. That can certainly be a challenge. If you clearly outline what forms of payment are accepted, especially highlighting terms for international clients, it may make it easier for prospects or clients to understand how they will be paying before the sale is confirmed. 

    Other online/mobile transfer options might include Venmo, PayPal, Wells Fargo, or Xoom. 

    Thanks!

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  • Hi,

    Can the Xero program be connected with QuickBooks?

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  • Hi Thomas,

    We'll be covering that in Part 2 of the online discussion. Please stay tuned – we'll be publishing it in just a few minutes!

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  • Hi Daisy,

    Thanks for your question. Xero does not integrate with QuickBooks. However, it's super easy to switch over to Xero from QuickBooks. All your data will be converted in just 3 hours. Thanks!

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  • Part II - "Recommendations for getting an invoice paid" has been posted! Please refresh your screens to have Sarah's latest tips appear. :)

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  • One of the tips is to have a late payment fee. I have a late payment fee policy but I have rarely if ever used it. My feeling is that it creates really bad will with the client who are often stuck working with their finance departments trying to get the to speed up. If we actually enforce the late fee we just create resentment with our contact who has not control over how the invoice is actually paid.

     

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  • Hey Thomas and Lily,

    To further the points in Part 2 – Absolutely, those conversations can get a bit awkward, but chasing payment is something you can't avoid sometimes. If you're using accounting software, you can set it up so that the software automatically chases payment for you. It'll do everything from sending your invoice electronically, reporting back when the invoice has been opened, telling you if it's been paid or not, warning you when a payment has been missed, and sending follow-up emails to the client. 

    If none of these work still, it's critical to pick up the phone. I always recommend approaching things lightly with a friendly call at first, and escalating as needed if the debtor is still avoiding payment. 

    Thanks!

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  • Good feedback, thanks David. Certainly don't want to create bad will with our clients. Have you ever had a client go way past the late fee deadline? If so, how did you deal with that?

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  • Hello Sarah,

    Thanks for this discussion opportunity!

    My question is: is there a way to integrate Xero with Insightly, so you can make your invoicing automated?

    In other words: now we receive tasks from the Insightly, create invoices manually via QB and email to customers.

    Is there a way to avoid this process, so once the job is done, and certain payment is due per the contract Insightly gives the info to Xero and it automatically creates and emails invoice to the customer?

    Thank you,

    Dan

     

     

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  • Totally makes sense to use a software that automatically "chases those payments". 

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  • Hi David,

    Completely understand. A more positive approach may be to incentivize clients to pay on time, instead of penalizing them for late payment. You can offer a (small) discount for on-time payment. It really doesn't need to be much. The appeal of saving money is a powerful motivator. You can present it like this:

    Total due: $4,200

    Save 3% if paid by [date]: $4,074

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  • Hey Dan,

    Great question. Stay tuned for Part 3! We'll be discussing integration capabilities between Xero and Insightly :)

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  • Thank you Sarah. That would be great if we find a solution on this matter.

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  • Refresh your screens - Part III is up! Sarah's final tips will be posted shortly so get your last questions in now. 

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  • Sarah's closing remarks have been posted! 

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  • Hi,

    I was wondering what the answer to Dan's question was. How this program will work with insightly and will everything be automated when the invoices?

    Thanks.

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  • Hi Sarah. Your podcast looks interesting. Any favorite episodes you can recommend for me related to this discussion about getting paid on time? Thanks in advance.

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  • Hi Dan and Daisy,

    Yes, Xero integrates with Insightly and you can create invoices directly within Insightly. You can track Xero invoices and bills along with sales opportunities and customer contact data in Insightly. You can then automate invoicing, and invoice reminders, with Xero. 

    Because all of your invoicing and customer info is kept in one place, the integration makes all of your customer interactions super easy. 

    Thanks!

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