How To Get Paid Faster & Improve Cashflow
Download as PPTX, PDF1 like1,095 views
The document outlines strategies for businesses to get paid faster by improving invoicing and collection processes. Key recommendations include maintaining error-free invoicing, promptly invoicing services rendered, and actively following up on debts. It also suggests utilizing electronic payment methods and understanding client payment cycles to enhance cash flow.
How To Get Paid Faster & Improve Cashflow
- 1. HOW TO GET PAID FASTER
- 2. IF YOU HAVE DONE THE HARD WORK... of making a sale
- 3. YOU SHOULD... have the cash sitting in your own account
- 4. REMEMBER THE MANTRA... Turnover Is Vanity Profit Is Sanity Cash Is Reality
- 5. STUDIES refreshingly different approach to selling your business The ON CASH PAYMENT... found that 85% of the reasons for non- payment of an invoice by a business is due to invoice queries or poor administration
- 6. ERRORS ARE ONLY FOUND OUT... The refreshingly different approach to selling your business when someone chases an unpaid invoice, often a considerable time after the service or goods have been delivered.
- 7. HENCE... Get it right the first time to avoid delays! Here’s how...
- 8. STEP 1: Get Your Invoicing Process Sorted CHAPS BACS
- 9. TOP 5 TIPS TO GET INVOICING RIGHT 1. Maintain a consistent, error-free invoicing format to avoid confusion 2. Use specific time frames e.g. ‘Pay within 14 days’ not ‘upon receipt’ 3. Encourage electronic payment which is quicker with lower bank charges 4. Use client information e.g. purchase order numbers to speed up client processing 5. Email invoices with read receipts to avoid the ‘lost in the post’ excuse
- 11. SPOT THE PROBLEMS IT Services Limited IT House Dell Street Luton SALES INVOICE LU1 1AB Invoice No: 2007/001 Invoice to: University Limited Order Date: Park Street Order number: Luton LU1 1T X VAT No: Attn of : Fred Customer ref Fred Company phone: 0870 121 1212 Account No Uni5190 Company Fax: 0870 121 1213 Description Qty Unit Price Net Cost IT support 2 350.00 525.00 Net Value 525.00 VAT 91.88 T OT AL 616.88 Payment terms 30 days NET from goods received
- 12. RESOLVE THE INVOICING ISSUES IT Services Limited IT House Dell Street No order details Luton SALES INVOICE LU1 1AB Invoice No: 2007/001 Invoice to: University Limited Park Street Order Date: Order number: No VAT number, Luton invalid invoice LU1 1T X VAT No: Attn of : Fred Customer ref Fred Company phone: 0870 121 1212 Account No Uni5190 Company Fax: 0870 121 1213 Description Qty Unit Price Net Cost IT support 2 350.00 525.00 Excel Rounding. Apparent calc error No bank details, Net Value 525.00 excuse to delay payment VAT 91.88 T OT AL 616.88 Payment terms 30 days NET from goods received
- 14. TOP 5 TIPS TO IMPROVE COLLECTIONS 1. Credit check new clients. Give slow pay/ no pay customers a wide berth. 2. Invoice promptly when service is delivered, not at month end or when you have time. 3. Split disputed invoice to get payment for undisputed portion while resolving dispute. 4. Offer to smooth annual bills and spread monthly via standing order. 5. Be persistent in chasing debts and keep abreast of developments in client’s company
- 15. STEP 3: Use Situation Enhancers
- 16. TOP 5 SITUATION ENHANCERS TO IMPROVE CREDIT CONTROL 1. Get full name identity. Find out the details of the person in charge of the accounts payable department. Keep notes. During conversations, remain polite yet assertive. This helps in controlling the outcome of the situation. 2. Payment methods are evolving. Consider using PayPal or credit card. 3. Adopt a credit control ethos – appoint a ‘champion’ 4. Consider bartering where options would benefit your business 5. Understand your client’s payment process and payment cycle
- 17. YOU GET PAID FASTER WHEN: Your invoices are You make it easy You follow-up straightforward for customers to progressively and devoid of pay with with clients and error alternative make credit payment options control routine and clear deadlines Split large Customers invoices and know you will stage bill chase
- 18. NEED TO TALK TO SOMEONE? If you need to talk to a Finance Director or finance specialist about cashflow, credit control, business strategy or any other financial management issue, arrange a FREE NO-OBLIGATION consultation with us. Email: clientcare@efm.uk.com or gary@efm.uk.com Phone: 01 582 516300/ 0845 129 9900 Visit us at: www.efm-network.com CONTACT US NOW
- 19. CONNECT WITH US Join newsletter mailing list Connect with us on LinkedIn Get tips and updates on our blog Follow us on Twitter Visit our website Email us now