Late payments to Aussie small businesses are on the rise, putting additional pressure on your small business cashflow and ability to cover your expenses.
According to recent research by OptiPay, the average number of days outstanding for invoices stands at a sluggish 38 days, causing major cashflow issues for many smaller businesses. That’s why it’s crucial to improve payment times to maintain a steady cashflow.
Here are five straightforward ways to improve payment times and boost your cashflow:
How to Get Paid Faster and Improve Payment Times
When your customers don’t pay on time, this late payment can cause a multitude of business and economic problems. Not only does your cashflow take a dip, but working relationships can be damaged and hours of business time can be wasted chasing up these overdue payments. Improving payment times is essential to avoiding these pitfalls.
We’ve outlined five key techniques to help improve payment times:
1. Offer Flexible Payment Options to Improve Payment Times
The easier you make it for customers to pay, the better. Provide your customers with a variety of payment methods, including credit cards, debit cards, regular Direct Debit payments, and payment gateways like PayPal. Offering multiple ways to pay is an excellent strategy to improve payment times.
2. Send Your Invoices Out on Time
The customer can only pay once you raise an invoice. Make sure you send invoices out in a timely way, and that the details are accurate and clear. Breaking large invoices into smaller payments that get sent out when specific milestones are reached can also improve payment times.
3. Offer Discounts for Early Payment
Customers won’t pay before the invoice due date unless it’s in their interest to do so. But you can incentivize them to pay early by offering discounts for fast payment. For example, offering a 2% discount if the invoice is paid within 10 days can encourage faster payments and improve payment times.
4. Get Proactive with Your Credit Control
Check your aged debtor reports regularly and chase up invoices that are overdue. Politely remind customers of outstanding balances. Sending automated notifications from your accounting software can help provide the push needed to settle bills, which will in turn improve payment times.
5. Consider Invoice Finance
In a worst-case scenario, where payments are well overdue and cashflow is suffering, consider invoice finance. Selling your outstanding invoice to a financing provider gets you the cash you need while passing the debt to the provider. This is another option that can significantly improve payment times.
Talk to Us About How to Improve Payment Times
If late payments are becoming an issue, it’s important to take action fast! Contact our team today by calling 1300 844 678, emailing us at [email protected], or submitting a form via our online chat. We’re here to help you improve payment times, get proactive with credit control, and offer faster, more reliable payment options for your customers.
Recent Comments