August 25, 2014 at 4:07 PM
Timely billing can greatly affect your success in getting paid for your products or services. If you adhere to a schedule of invoicing and customer contact, you will increase your timely payment rate.
Inadequate management of receivables can cause serious cash flow deficits. Take a look at your billing procedures and make just a few simple changes. You may be able to INCREASE the number of accounts that pay on-time, DECREASE your number of aged accounts (past 60 days) and DECREASE the number of accounts you submit for collections.
- Process and send the bill the day of service/purchase or at least within a day or two. If you delay your billing, you send the subconscious message that there is no urgency to pay. The sooner a bill is received by your customer, the sooner it’s paid. If you only send out invoices once a month, the transaction could be as much as 30 days old. If it’s net 30, even if paid on time, the payment is received as much as 60 days from transaction.
- Make sure that a due date and net terms are prominently displayed on the invoice. Set your expectations for payment.
- Send out statements to all customers with outstanding balances. This should be done at least monthly and every two weeks is even better.
- Pick up the phone and CALL. Just a friendly reminder call can help you find out why it hasn’t been paid (didn’t see the bill, an invoice discrepancy that needs to be resolved, etc.).
These are just a few ways to improve you billing process. Visit the resource page for more info and check this blog page often for more articles.