Improving Cash Flow: How To Get Paid More Quickly

Written by Chloe Harwood

If you’re a small business owner, then you’ll know that, sometimes, it’s not finding new customers that’s threatens your success the most: it’s trying to maintain a healthy cash flow while you’re trying to get the money that is already owed to you. While your customers will be eager to receive the work that you’ve done for them, some won’t be quite as eager to pay the invoice for the services you’ve provided – and this can seriously harm your cash flow. So how do you ensure you get paid more quickly? We take a look below.

Agree on Terms Beforehand

You can’t have too many complaints if you just say you’ll send an invoice, and then the recipient isn’t bending over backward to pay it as soon as they can. After all, was there anything in the contract that said they needed to pay within a set time, or are you just relying on their good manners? It’s always a good idea to spell out the rules of the agreement before you begin too much work. If they know that payment is due within seven days of the work being completed, they won’t have much of a leg to stand on if day eight rolls around and they still haven’t paid.

Cut out Delays

Sometimes, it’s not the customer’s fault that you haven’t got the cash in your bank account. It’s because your invoicing process is too slow. If you’re still sending out invoices in the mail, then check out, and take your invoicing electronic. This could save days of waiting for the postal service to get your invoice into your customer’s hands! You can also review your received payments method, to ensure that it’s not taking longer than it should do.

Offer Discounts

If you can’t get where you need to be with just a good word, then a good word and a bribe may be the right way to go. If you offer discounts to your customers for paying early – say within five days – then you’ll likely find that your customers are much more likely to get around to paying the invoice in a prompt manner. The discounts don’t have to be anything too grand; even a discount of, say, 3% might be enough for them to get out their credit card.

Friendly Reminders

But of course, it’s important to keep in mind that things do pass people’s minds. An unpaid invoice might not signal anything overly malicious; it might just be that they’ve had an extra busy couple of days in the office, and, like it or not, your company’s cash flow wasn’t at the top of their interest. If an invoice hasn’t been paid, look at sending a friendly reminder. Use nice terms; studies have shown that people are more likely to pay straight away if a ‘thank you’ has been included.

When it has been paid, make sure you’re taking the time to thank them for payment. A nice word will make them more likely to pay quickly in the future!

About the author

Chloe Harwood