When your customers pay their invoices on time, it can help with positive cash flow in your business. There are some things you can do that might help with getting you invoices paid on time.
1. Invoice promptly
Be on the front foot with your customer. Make sure you agree the terms of payment upfront and invoice them promptly. This should be with the person who will pay the invoice (not just their business). You could also consider giving discounts for prompt payment.
2. Reference check new customers
You want to check to make sure they have a good payment track record with other businesses. You can check a customer’s track record of payment by asking them to provide 2 referees they have previously done business with. Give those people a call and ask whether they paid their invoices on time.
3. Set payment terms for the invoice
Most businesses give their customers a set time period between when the goods or services were provided and when payment is due. These are called payment terms, and many businesses now expect payment within one week.
4. Send the invoice to the right person
In larger businesses, the person who you deal with on a day to day basis can be different to the person who does the account payments. Make sure you find out exactly who you need to send the invoice to so they can pay you without delay. Also, make sure you have all the details on the invoice correct, so your customer has no reason to come back with questions, which can delay your payment.
5. Have multiple ways to accept payment
Ensure you include the specific ways your customers can pay you on the invoice. These might include:
- Direct transfer (here you could list a Westpac bank account BSB and account number)1
- Credit card payments over the phone
- International payments (to accept international currencies you may need a foreign currency account. Find out more about Westpac’s foreign currency accounts)1.
6. Follow up your customers if their invoice is overdue
Be on top of when your invoices are due and call your customer directly to ensure you get paid. You want to develop strong relationships with the people who pay you.
Invoices are necessary to ensure you get paid in your business and these few simple steps will help you and your customers have a healthy payment relationship. As you begin to receive payment more quickly, you may find your cash flow is better too.
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Things you should know
1. Westpac’s products and services are subject to terms and conditions and may be subject to fees and charges. This information does not take your personal objectives, circumstances or needs into account. Consider its appropriateness to these factors before acting on it. Read the disclosure documents for your selected product or service, including the Product Disclosure Statement and , before deciding. Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
This article should be used as a guide only. It is an overview only and should not be relied upon.