If this is your first experience collecting accounts receivable for your business, you may be wondering “what’s the big deal?”. I invoice a customer with a net-30, they have 30 days to pay it. Sounds simple enough. However, as you begin to work with more clients down the road, you’ll notice that it gets more and more difficult to manage your payment collections which could majorly affect your cash flow as a small business!

To avoid having cash flow issues and to stay on top of your accounts receivable customer balances, here are some of our best tips to getting paid faster and bringing more cash back into your business!

Tips On Dealing With Unpaid Invoices

Tip #1 — Keep track of your payment schedule

If we asked you right now “how many clients do you have that haven’t paid their invoices yet”, would you be able to answer it within a couple of minutes? If so, do you have the customer’s contact information readily available?

Both these factors are important when managing your unpaid invoices. In order to understand where your money is, it’s best if you create a schedule or dashboard of who owes you and how long the money is overdue. Having a reliable schedule will help a TON when trying to manage the collection of your accounts receivable.

If you’re using TrulySmall™ Accounting already, all of this information is easily accessible right from the Invoices page. You can even send another invoice as a reminder before the due date right from within the software!

Tactic #2 — The Power of Follow-Ups

Once you have all the information from the above organized, it’s time to follow up with the customers who are nearing their invoice due date or are overdue! Go down the list one by one and send them an invoice or call them directly. If you’re using TrulySmall™ Accounting, just hit the arrow next to the ‘Save’ button and choose ‘Preview and Send’. This will allow you to send your invoice again along with a customized message.

To make your life even easier, you can document the progress and outcome of your follow-ups. To do this, start a separate note or document somewhere or track it in the ‘Notes’ section of your TrulySmall™ Accounting invoice. For example, if you left a voicemail on their phone, make a note of this and the date you tried to contact them. Then follow up again 24 hours later to see if you can reach them or get a response!

Continue to follow up with calls or emails until you have received a response or a payment. Here is a basic follow up schedule to use:

• Day 1: First follow Up (+2)
• Day 3: Follow Up (+4)
• Day 7: Follow Up (+7)
• Day 14: Follow Up (+14)
• Day 28: Follow Up (+30)
• Day 58: Follow Up (+30)

… from there on, once a month (but we hope it doesn’t get to that!)

Tactic #3 — Do Your Research

If your customer’s phone number has been disconnected or an email does not work, it’s time to go to the world wide web to figure out how to contact them.

When searching for a client name or company, go to Google and search for the company website.  Usually, they have a “Contact Us” section with a phone number or email.

Or, head over to LinkedIn to search for either the company name or the client name within the advanced search section. Most professionals include contact information directly (email, phone number, etc) on their profile.  LinkedIn is another great tool to use to find the right information to collect your cash.

Tactic #4 — Provide Different Payment Options

Sometimes, all a client needs as an incentive to pay quicker is a more convenient payment method. If you’ve been requesting cash payments, some other options are PayPal, Venmo, EFTs, Cheque, or even Credit Card! If you’re using TrulySmall™ Accounting, you can set up credit card payments easily in the settings. A payment link will be sent out along with your invoice so that your customers can pay using their credit card on the spot.

There are other options like PayPal or Stripe too that allow for credit card payments as well as other modern payment methods like Apple Pay, Google Pay, PayPal link, and more!

Tactic #5 — Shorten Your Payment Terms

As we talked about in our Payment Terms article, it’s up to you to decide what payment terms work best for your business and for your clients! If you find that having a longer payment term like a net-45 or net-60 is not working great for your cash flow and is giving your clients too much freedom, try shortening your payment terms to a net-30 or net-15!

When you shorten your payment term, you can also more easily enforce late penalties or early payment incentives. The important thing is figuring out something that works and is fair for both you and your client.

Tactic $6 — Build a Good Relationship With Your Clients and Keep Them Happy

Happy, satisfied customers typically are more obliging when it comes to paying on time as they have built a trusting relationship with you. If you provide an excellent service or product, typically there will be a higher chance your customer feels incentivized to pay you earlier.

You can even go the extra mile by sending over coffee or cupcakes as a way to thank them for being loyal clients. Whatever it takes! Keeping your customer smiling will be an added bonus when you start seeing your bills getting paid on time!

Ready to master your invoicing and start getting paid faster? Try TrulySmall™ Accounting for free today and use our invoicing tool!