As a small business owner, dealing with late invoices could be and awkward and messy. It could likewise result in a cash flow issue for your business. So how could you encourage timely payments and temporarily resolve a cash flow issue? Here’s how:
Consider Invoice Factoring
Suppose your customer promised to pay by the end of the month, but you need the money now to run your business? One way of solving this issue is by selling your invoice to a third-party lender. With invoice factoring, the third-party lender would give you the money you need in exchange for them taking ownership of your customer’s debt. So you get your money, and your customer would pay off their debt to the third-party lender. For even more convenience, some lenders like TAB Bank offer online invoice factoring.
Set a Due Date in Advance
The key here is deciding on the most appropriate amount of time. Plenty of businesses have a limit of 10-15 days, but you can adjust your limits to what’s feasible for you and your client.
Consider Sending your Invoices Online
Online invoicing software helps make it easier for your clients to settle their invoices. You could easily send your clients their invoices online through an email message with a specific link. They will then be redirected to a secure payment processing platform. This means you’ll no longer have to worry about scheduling meetings or taking time off work to settle.
Ask If You Could Keep Your Clients’ Credit Card Information on File
If you’re dealing with repeat clients, consider asking them for their credit card information as a fail-safe measure. This would allow you to charge payments yourself. Before doing this however, you need a written permission from your clients. You’ll also have to make sure that you could store their sensitive information securely.
Yes, dealing with late, unsettled invoices could be frustrating, but it’s a reality that you just have to accept and deal with. Fortunately, you have options and all you have to do is find one that would best suit your needs.