By Glenn Clifford-Perkins, accounting partner, Armstrong Watson
In today’s business environment, efficient cash flow is essential.
One of the key factors that will influence your cash flow is the timely payment of invoices.
To ensure prompt invoice payments, you can adopt several best practices and leverage the benefits of offering a “pay now” option.
Best practices for raising invoices
- Invoice promptly – Don’t let your invoices sit on your desk for days or weeks. Send them out as soon as possible after the work is completed.
- Invoice clearly – Make sure your invoices are easy to read and understand. Include all the necessary information, such as your name and contact information, the customer’s name and contact information, a description of the work you performed, the date of service, amount due and payment date.
- Offer multiple payment options – Make it easy for your customers to pay you by offering multiple payment options, such as credit cards, online payments, and cheques.
- Send payment reminders – Send payment reminders to your customers a few days before their invoices are due. You can also send reminders to customers who have past due invoices.
- Charge late fees – Consider charging late fees to business customers who do not pay their invoices on time. This can help to deter overdue payments and encourage customers to pay their invoices more promptly.
Adding a “pay now” option
To further accelerate payment receipts, you may want to incorporate secure “pay now” online payment options, such as Stripe or GoCardless, directly into your invoices.
Studies have consistently demonstrated the effectiveness of the “pay now” option in accelerating invoice payments.
Invoices with a “pay now” button were paid an average of 10 to 12 days faster than those without, which will ultimately mean you spend less time following up missed payments.
All of the above will help ensure you get paid sooner. Additionally, your customers may be more likely to use your services again if they can make their payments quickly and easily in receipt of a prompt invoice that clearly sets out your terms and offers multiple payment options.
For further help, guidance, and advice on streamlining your invoicing process to get paid faster and boost your cash flow please get in touch on 01768 222030 or email [email protected]
