Most small business owners complain about the lack of cash flow, the debtors extend their credit terms or not pay at all, so;
How can you stop extended trading terms?
How can you stop from re occurring and change this behaviour?
The answer, according to AR Cash Flow is often within you own business. Your clients are not always to blame if you don’t invoice promptly, accurately and provide support documentation.
Have a good look at how you are managing your business, and I guarantee you that you will find that the crucial part of your business, invoicing, is left to either the last minute when cash flow is tight or when there are bills to pay.
If you are serious about change, follow these simple steps, stick to them and start enjoying running a business.
1. Invoice as soon as the job or service has been finalised, in some cases progress invoices are acceptable, don’t delay them.
2. Ensure that invoices include your clients purchase order number, if this is not possible, name and contact number of the person responsible for placing the order.
3. Clearly indicate your trading terms or the terms agreed with the client.
4. Attach signed delivery dockets, consignment notices or any other document that is required to support the invoice.
5. Up date your data base constantly, contacts change, business move.
6. Maintain close contact with your accounts department, they may be able to tell you a bit more about your client’s business.
7. Look for warning signs, if your client is delaying payment, complaining about deliveries or incorrect charges, it could be a sign of financial difficulties.
8. Look closely at your client base, are all of them profitable? If the answer is no, it may be time to look for new clients and face these down.
9. Are you carrying some of them because they are old clients, mates? If they are not generating profit, they are costing you money. Keep them as friends instead.
10. Finally, revise your current financial agreements, and seriously look into one of the most cost efficient ways of running a health business. Factoring.