Ahh! The entrepreneurial American dream: A business owner strikes out on her own to provide a product or service that her customers didn’t know they needed. Her clients place such a high value on her work that not only are they surprised at how affordable the offering is, but they pay for it as quickly as possible.
The reality is that no matter how innovative or valuable its product or service may be, a business will not survive if it does not invoice and collect payment for its offerings. Furthermore, even if an organization issues invoices in a timely manner, some clients will be better at paying bills by the due date than others. Below are five ways that business owners and CFOs can manage invoice processing and client relationships to help keep cash flowing – without disrupting their dreams and becoming collections agents.
Tip #1: Keep Invoice Processing Simple, Short, and Speedy
The following three S’s are the keys to an efficient invoicing process:
- a simple, clear description of what is owed, when it’s due, and whom to pay;
- a short, accurate explanation of the products or services delivered; and
- a speedy, method of delivering the invoice to the customer.
Using accounting software to automatically generate invoices is a great way for business owners to manage the minutiae while focusing on the high-level needs of their companies.
Tip #2: Remember that Timing is Everything
An agreement to work with a client over a period of time should include a signed contract with clear payment milestones. Invoices should be sent promptly when those benchmarks are met. While halting project progress may not be ideal, business owners and executives should position themselves to be able to cut their losses if a client is not meeting payment obligations.
Tip #3: Know Who Pays the Bills
Sometimes, the primary client liaison is not the person who processes and pays invoices. In fact, the two individuals may not even work at the same location. Know what name and address need to be on the invoice so that it will be paid as quickly as possible.
Tip #4: Say “Thanks”
Thanking a client for paying an invoice on time may seem similar to a parent thanking his or her child for completing an assigned chore such as making the bed. However, business owners and executives who habitually express gratitude for receiving a timely payment may find it easier to build credibility and strong client relationships.
Tip #5: Don’t Delay in Asking for Payment
Continuously asking clients for compensation may seem like a daunting task. However, a late or missed payment could be the result of an administrative failure or a process error (especially given that many payment processes are now automated). Therefore, kindly but assuredly bringing the issue to the client’s attention could be a helpful first step in retrieving delayed earnings.
Let CRI Be Your Invoice Processing Dreamweaver
The most important thing to remember about invoicing and getting paid is that you have earned your compensation. Therefore, you owe it to yourself to implement an efficient and effective invoicing process. CRI’s client accounting services team knows that developing such a procedure is often easier said than done. With our technological core platform and our expertise, we can help you make your operational efficiency dreams come true. Learn more about our technology and contact us with any questions!