When your customers pay their invoices on time, you create stronger cash flow in your business. Here are 6 specific actions you can take to ensure your invoices get paid on time.
1. Do reference checks on your new customer
You want to check to make sure they have a good payment track record with other businesses. You could check a customer’s track record of payment by asking them to provide 2 referees they have previously done business with and give those people a call and ask whether they paid their invoices on time.
2. Invoice promptly
Be on the front foot with your customer. Make sure you agree the terms of payment upfront and invoice them promptly. If you hold an eligible Westpac business bank account1 and are registered for online banking, you can use Biz Invoice, which is our free, simple and easy invoicing system. You can create invoices and send them to your customers. Make sure you address this to the person who will pay the invoice (not just their business). You could also consider giving discounts for prompt payment.
3. Set payment terms for the invoice
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 many businesses may 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 all of 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)2
- 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)2.
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 assist you to get paid and these few simple steps might help you and your customers have a healthy payment relationship. As you begin to receive payment quickly, you may find your cash flow improves.
Things you should know
1. To be eligible for Biz Invoice you must hold a Westpac Business One Low Plan or Business One High Plan account
2. 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.