Money is needed to finance your operations…so why are you waiting so long to collect what is owed to you?
1 - Eliminate paper billing
Many companies accept invoices via e-mail. You just need to ask your client if they will accept an invoice via e-mail. This saves a 0.44 cent stamp, an envelope, paper and ink to print the invoice and the effort to stuff the envelopes and mail them.
More importantly it eliminates the 3-4 days for it being "In transit" via the USPS, the possibility of it being lost, the time it takes to receive the invoice and have it delivered to the accounts payable department at your clients office.
2 - Send out your invoices when you ship
Why wait to send the bill? If possible your shipping department should be directly connected to your invoicing process. If you're really progressive the shipping team should be trained on how to invoice customers.
3 - Don't batch your credit card collections
I've seen many a small company strapped for cash because they run the credit cards every Friday. Run them as soon as you've provided services or shipped the product. Are you so rich that you can wait to get paid?
4 - Before you ship check so see if the customer has any outstanding bills
Don't keep selling products and services to clients who aren't paying. Next time an order comes in, check to see if there are any outstanding bills and call the client up immediately. Say "New policy…we can't ship if the account has an overdue bill." It's amazing how fast you can get paid when the customer needs their product and starts asking their own accounting department why they haven't paid the bill yet.
5 - Pick up the phone, call the client and ask to speak to accounts payables
Sometimes getting a person on the line can help expedite an overdue payment. Remember that e-mails, faxes and letters are all open to interpretation by the receiver. If you eliminate the possibility of miss communication you simplify the process and speed up things overall.
BONUS HINT - Get a big red stamp that says "Past Due" and stamp the invoice and the outside of the envelope. Then send it to the owner of the company.
Nothing gets action faster than those big red words on the outside of a letter. If the owner or CEO gets it…it will help expedite matters. (Caveat: Use this sparingly….it can create some animosity toward your company in the clients accounts payables department.)
Remember:
Your goal is to fund your company…not to give short term loans to your customers. Stop wasting time, get that cash and grow your business.
