Cashflow – It doesn't have to feel like you are training like Rocky Balboa
Cashflow is the life blood of any business; you can have all the sales in the world, but if you aren't getting paid then then you aren't going to survive. We have all heard people saying “Cash is King” which probably makes most people switch off, but cash is one of the most important things a business requires in order to operate.
Getting paid by your customers shouldn't be difficult, but sometimes it can feel like you are Rocky Balboa training for your big fight. Come on, you remember the scene in Rocky II where he is chasing a chicken and its getting away all the time until he eventually catches it! If that is the effort you are putting in to get paid by customers then I have 4 solutions to get you paid quicker and even on time – imagine that!
Get people set up with a direct debit and use a solution like GoCardless. It's easy to set up, easy to deploy to customers and when they pay you on the deadline date, it automatically reconciles your Xero or QuickBooks. If your customers won't go with a direct debit then question why. If they pay on time every time, that's fine, there's no need to push it. If they are unreliable with payments then explain to them that you have analysed how many days it takes for them to pay you and it's longer than in the terms of your agreement, and you need them to pay on time – this is the way to do it and saves them the job of making the payment.
Split the bill into manageable chunks – if you would normally charge them annually, start charging them monthly. This is great for both you and them as it means they get manageable monthly invoices (taken by direct debit); they don't panic when they get a big bill at the end of a year, and you get a reliable income.
Get paid in advance. If you have a project that you are working on for a customer, break the project into milestones and get payment up front for doing the work. If you rent accommodation then you pay for the month ahead - why not do the same for your services?
Credit control – absolutely no business owner likes chasing their customers to get paid. I don't care what you say, it's an uncomfortable question because we are far too British, all of us. The only people that like doing it are hard necked credit controllers. However, if you have hundreds of customers there are only so many phone calls and emails a single credit controller can make. Employ a cloud-based solution like Chaser to do the heavy lifting and ensure that every one of your clients that you want receive an email chasing that payment. You can opt customers in or out, escalate the message that is sent and who its sent from, link to your Xero or QuickBooks, and it automatically chases debtors on a specific time and day of the week you that you decide. You can use this as standalone credit control or in conjunction with what your credit controller does – a great tool for them, too.
The easier you make if for someone to pay you, the more likely they are to pay you on time; it's as simple as that. If you employ one or more of the points above to your business, I can guarantee that you will see the cash come in quicker and the debtor days come down.
If you want to know more or discuss getting your credit control under control and getting the cash you are owed in on time, get in touch and let's get the cash rolling in without having to train like Rocky!
If you would also like a demo of the apps mentioned above, a chat through your accounts or some tax advice, just give us a call on 01224 573 904 and we'll talk you through it - no long-winded emails back and forth; just simple, personalised advice.