- April 8, 2019
- Posted by: Chowdhury Shahid Uz Zaman
- Category: Finance
Liquidity is the lifeblood of the company. Here are 5 tips to improve billing and cash flow management are the key to effective management.
Do you want to find a system to improve the billing processes of your business, but you don’t know which strategies to implement? Below we provide you with 5 practical tips that will allow you to improve the management of cash flows by increasing company liquidity in a simple and immediate way.
1 # Send invoices as soon as possible
The first rule to receive payments due from customers is certainly to issue the invoices of the products-services sold as soon as possible, avoiding wasting time unnecessarily: in this way, in addition to regularizing yourself immediately from the fiscal point of view, you will also pass for a serious, precise and punctual professional.
2 # Always indicate payment terms
All invoices sent to any customer must always include precise payment terms, because if you do not specify a period within which to have your account settled, you risk getting the money much later than you expect.
If you want to speed up transactions and increase the cash flows of your business, you can, for example, offer the public convenient formulas such as pay within 10 days of signing the contract and receive a 2% discount on the entire amount to be paid. Another good trick is to request a 50% deposit for long-term services (a few months, a year or more) at the beginning of the collaboration and the remaining sum in installments or completed work.
3 # Ensure clarity and simplicity
If you want to receive the payments due to you, you absolutely must propose a simple and effective billing system that allows the public to understand on the fly how much to pay, by when and for which service: it takes care of every single part of the bill making it easy to identify and read the date of issue and the number of the same, the data of the company in debit (company name, address, VAT number, etc.), the deadline and the payment methods; enter if possible a brief description of the service to be paid or of the product and the amount, even one. By setting the document in this way, you are certain to guarantee customers all the information they may need to proceed with the balance.
4 # Propose online payment methods
Given that, according to recent studies, those who propose online payment methods such as PayPal or other similar solutions on average receive the money due as much as 17 days before the others, even if you want to put customers in a position to be able to pay you faster, you should embrace immediately new technologies, so as to have available solutions that know how to be immediate and at the same time also safe.
5 # Set up an action plan for customers who do not pay
To always ensure good corporate liquidity, it is extremely important to ensure that all customers settle their debts, if possible, within the agreed time frames: when this does not happen, it is necessary to resort to a precise action plan based on which to act according to the delay of the payments in question.
These are our 5 practical suggestions for improving the billing processes of your company: effective solutions to be exploited every day with the primary intent to get you the payments due with greater punctuality.