It's the perennial question for businesses: how do you get paid on time?
There is no simple solution as some people won't pay on time because they have a cash flow problem, are slow payers anyway and would rather keep their money in the bank for as long as they can get away with it, or simply vanish without paying.
There are, however, ways businesses can help to mitigate these problems, and although not every bad payer can be dealt with, it's possible to set up systems that make invoicing, getting clients to pay and issuing receipts that can make the financial administration a lot easier.
Here are some tips to consider.
Create professional invoices and receipts
It's very easy to create really professional invoices and receipts without spending inordinate amounts of time devising and designing them in-house. Technology has advanced in leaps and bounds, and businesses can take advantage of an online invoice template that looks good and spells out exactly what goods, services and expenses are being charged for. Invoices prepared this way can be numbered and then emailed to clients (saving money on stationery and postage) and an electronic record kept that can be instantly accessed when payment is made and duly noted on the invoice. Receipts can similarly be issued to the client electronically, giving a justified impression of an efficient organisation.
Make it easy for clients to pay
Cheques still exist, of course, but modern business financial transactions are more normally carried out online today. If a business only accepts payment by cheque (or cash, though that could be construed as dodgy in terms of the tax authorities), then it hasn't taken advantage of the technological revolution in finance. Cheques are a time-consuming way of getting paid and incur postage expenses as well as time taken filling in a paying-in slip to send off to the bank. They can then take several days to clear. Internet banking is practically instantaneous in terms of getting money transferred, so it's well worth businesses setting up an online facility for clients to pay. Another method is to set up a card payment system so that clients can pay by debit or credit card; however, depending on the deal done with credit card providers, each transaction could be costly if it's a relatively small amount.
Use software that finance employees can access
The development of cloud internet services provides an alternative to desk-based finance systems. Employees dealing with finances can get instant and real-time access through data that is regularly uploaded to a cloud provider and keep in daily touch with clients who have paid and those who have not. Automatic reminders can be sent out. Freelances working on projects can upload billable hours and expenses, enabling the business to keep an overview of the total financial situation.
With careful planning and effective systems, businesses can monitor their finances, create and send professional invoices and receipts and aim to regularly get paid on time.