Think of the amount of time you spend on collecting your invoices. What a waste of productive time!
You have provided your client with work timeously so why should you wait for payment beyond your agreed terms?
Below are some tips that will help you collect your invoices quickly.
- Agree on the value of the invoice and the payment terms with your customer before you commence the work. This will prevent your customer from making excuses for not paying the correct amount or not paying on time.
- Email your invoices to the customer. Gone are the days when you need to put invoices in an envelope and use snail mail. With Xero you can create the invoice and simply email it directly to your client. You will also know when they have opened it, as a mark appears in Xero against this invoice when they do.
- Record the Invoice due date correctly according to the industry that you are in. If the standard terms in your industry are 14 days, then do not allow longer terms. Your due date can be set within Xero when creating the invoice automatically as a default which you can adjust per invoice should you need to.
- Invoice immediately after finishing the work at the latest or whenever monies are due during a project, for example a deposit at the start of a project. Create draft invoices at the commencement of a job and adjust this as need be during the life of the project as soon as portions of work are completed. Once the work is completed this draft invoice can be converted into an actual invoice with a simple push of a button.
Should you wish to improve your cash flow, please give Neil a call for a free consultation.