Every year, tens of thousands of perfectly profitable businesses go bust. The product or services they sell are in demand and they can charge enough to make a healthy profit. Yet, because their customers do not pay them on time they have no choice but to fold. They literally cannot keep the lights on because they do not have the funds in their business accounts to pay the power company.
Poor cashflow is the bane of any entrepreneur or business owner’s life. Having to chase customers for payment sucks up time and leads to issues. So, you want to make it as easy as possible for people to pay you. The more you do that the less likely you are to have cashflow problems. Here are a few suggestions to help you with this.
Equip your staff to take payment at any time and anywhere
Being able to take payment anywhere, anytime is the goal. Equipping each customer-facing person with a mobile card reader enables you to do that. That way, when one of your electricians finishes a job, for example, they can then take payment from that client on the doorstep. It is fast and secure for you and your customers.
It is also a great way to open up new markets for yourself, especially if you are a firm that sells physical products. If sales are slow in the shop, you can easily get a stall on a local market for a few weeks and see how that goes. People who buy from you there can pay you using the mobile card reader. It really could not be easier.
Switch to taking payment upfront
If you are currently taking orders, then sending an invoice for payment a month or so after your client has received the product, consider changing that. Ideally, you want to have been paid before the goods leave your premises.
You will be surprised by how often firms will still buy from you when you change the terms and conditions like this. It has to be introduced in the right way. For example, you write to each client and tell them in good time that you are going to have to take payment in advance.
Reward early payers
You can also try sweetening the deal by offering a decent discount to those who pay you in advance. As well as for customers who settle their invoices before the due date. This article suggests three types of meaningful rewards you can use to incentivize customers to pay you early.
Take bigger deposits
If you provide a service that is not typically paid for in full upfront, like building services for example, start taking a bigger deposit. Make sure that what you ask for at least covers the cost of the materials and the labor that you will have used before the next payment is due.
Using the above suggestions will have a highly positive impact. It will make it more likely that people will pay you on time, which will help your cash flow and keep your firm financially viable. If you would like to learn more about doing that, click here.