British small businesses are tired of chasing payments, with new research from Xero revealing a total 64 per cent of small business invoices are paid late. It also reveals that business owners spend an average 10 per cent of their day chasing up late payments.
Besides the wasted time and stress, chasing invoices can have a significant impact on the cash flow of a business. Below are five things you can do now to improve the invoicing process and ultimately boost your cash flow.
Forecast your cash flow
Money goes out, but will it come back? By mapping your finances out on a weekly, monthly, quarterly basis you will start to get an idea of when a surge is likely to happen, or a drought that might cripple your payroll.
Discuss payment terms
If standard payment terms are 30-days, don’t assume your suppliers don’t offer a discount for early payment.
Pay attention to detail
Any confusion or something wrong with an invoice, for example the date on the document doesn’t match the date it was sent, or the reference number is wrong, could create a payment lag. Administrative errors happen, but repeated errors will look unprofessional as well as disrupt cash flow.
Use preferred suppliers
It goes without saying that regular payments offer the chance for businesses to build relationships and support each other. Establish a routine and keep each other informed of best practice, policy innovation and tech advances.
Empower everyone, embrace technology
Use cloud accounting software that allows you to send invoices straight from your phone and allow multiple people to view account data and check reports regularly via desktop or mobile, at home or on the beach – and even send polite, automated reminders for payment while you sleep.
Xero makes beautiful online accounting software for small business that helps more than 130,000 UK subscribers stay on top of their finances - anytime, anywhere, on any device. Try it free for 30-days.