6 ways to get your invoices paid faster
3-minute read
Want to improve your cash flow? Encouraging your customers to pay your invoices on time could help create stronger cash flow in your business. Here are six simple actions you can take, which may help increase the chances of getting your invoices paid promptly.
Key take-outs
- Do reference checks and set up payment terms
- Invoice promptly and to the right person
- Offer multiple ways to pay
- Follow up overdue payments promptly
1. Carry out reference checks on new customers
When you acquire a new customer, it pays to check with other businesses they’ve dealt with to ensure they have a good payment track record. You could do this by asking your customer to provide two referees they have previously done business with – then give these people a call and ask whether or not their invoices are getting paid on time.
2. Set payment terms with your customers
Many 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 should be established upfront to avoid any misunderstandings once you start doing business.
3. Invoice promptly
Be on the front foot with your customers and invoice them as soon as you can. It’s a good idea to do this straight after you’ve made your delivery or finished a job.
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 invoices to, so they can approve payment without delay. Also, make sure all of the details on the invoice are correct, so your customer has no reason to come back with questions, which can delay payment.
5. Offer multiple ways to accept payment
It’s can be a good idea to feature all the payment options available, on your invoices. They might include:
- Direct transfer (listing your bank account BSB and account number on your invoices)
- Credit card payments over the phone1
- International payments (noting that 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 any payments are overdue
Keep on top of when your invoices are due and call customers directly if payment dates have passed.
These six simple actions may help you receive payments faster, which can lead to an improvement in cash flow. And remember, you want to develop strong relationships with the people who pay you – so a warm ‘thank you’ from time to time for prompt payments can only help strengthen that relationship.
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Things you should know
1. Westpac’s products are subject to terms, conditions and fees; and eligibility criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement and T&Cs for Westpac business bank accounts, business savings accounts, merchant services, foreign currency accounts and online banking, by clicking the above links and consider if the product is right for you.
The information in this article is general in nature and does not take your objectives, financial situation or needs into account. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.