Did you know that Australian companies are the slowest at paying outstanding invoices — worse than Mexico, South Africa and the United Arab Emirates — according to data from MarketInvoice.
Being a small business ourselves, we know how hard the cash flow can be sometimes, especially when you don’t get paid for your services or don’t get paid on time.
Chasing invoices is never pleasant, takes time and may affect relationships with your repeat customers.
Here are some tips that may help you get paid faster
Invoice on time. Use the Xero app on the go to send invoices right away.
The sooner you invoice the sooner you will get paid. It’s as simple as that (well in theory, there are always the late payers).
People are more likely to pay you if they still remember you and the service you provided, than when you wait until end of the month to catch up.
If you haven’t tried the Xero Touch app yet (available for iOS & Android) and spend lot of time on the road, you should give it a go:
Email your invoices, do not use snail mail.
Not only will the invoice get to your customer faster, you will help save environment for future generations.
There is lesser chance of it getting lost in the mail or on someone’s desk. Just make sure that the invoice goes to the right department. Xero lets you to email to more than one person (e.g. you can send it to the person you normally deal with or that is likely to approve the invoice AS WELL AS send it to their accounts department). This feature is not available via the app yet.
If you are on good terms and they use Xero as well, you may even be able to use Xero to Xero for the bills to be recorded automatically in their payables, waiting for approval.
Email online invoices not just pdf versions.
Xero automatically includes link to online invoice in the email template.
When your customers get the email, they are taken to the invoice online with a PAY NOW button which makes them more likely to pay. (This is once you setup your online payments options below)
Moreover, you will be able to see when they viewed the invoice so that there are no more excuses of invoices being lost.
Accept online payments.
You need to make it easy for your customers to pay you and give them options. With Xero you are really spoilt for choice. There are various add-ons which pricing varies so you need to choose what’s right for you.
Most of them will attract merchant fees, but you need to assess whether it is still cheaper for you to pay those rather than waste your time chasing the money or getting paid late.
Set up automatic reminders.
Automatically remind customers of payments that are due or are overdue by a certain number of days.
Keep in mind though that your Xero file needs to be up to date with the receipts coded so you don’t chase money you have already received.
You can turn them on here:
- In the Accounts menu, select Sales.
- Click the Awaiting Payment panel.
- By the clock icon , click Invoice reminders off.
- Select the Email customers when an invoice is checkbox.
- (Optional) Edit or delete the default reminders, or add your own.
- (Optional) Select the Include a link to the invoice PDF checkbox to include PDF invoice links in all reminders.
- (Optional) Select the Don’t send reminders for amounts owing on an invoice under checkbox, then enter an amount.
Click Save. The clock icon shows that reminders are on for your organisation. They’ll be sent for all invoices that are marked as sent.
Seeing it is in Australian nature to not pay on time, you need to make everything to keep your cash flow steady and not leave it to a chance.
If you need a hand with any of the above don’t hesitate to give us a call on 07 3160 7386.
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