Tips for getting paid before the holidays
Positive cash flow, the lifeblood of SME businesses is critical to sustaining and growing a business. Many business owners rely on revenue to indicate the health of their business. However, as the saying goes “revenue is vanity, cash flow is sanity, but cash is king”.
Christmas is nearly upon us and it is the season to be jolly! But will you be feeling as full of festive cheer at the end of December when you find your outstanding invoices have not been paid?
With many businesses shutting down well before the start of Christmas, there is a narrow window of opportunity for your customers/clients to pay you. We understand every business needs money to survive that is why we created a checklist with tips and trick on how to get paid before Christmas.
Remember businesses shut down early
As you probably know, most offices will be closed from Friday 22nd December. That means that by that date, you need to send an invoice to the right person, with the correct information and on time. Otherwise, you will wait for the payment after the New Year.
Keep in mind that invoices that are sent two weeks before Christmas are likely going to be paid after the holidays, so plan your payment schedule on time.
To make sure you get on that December payment run:
- Send your invoices over as early as possible.
- Include a full statement of all outstanding invoices.
- Make sure your payment terms and due dates are crystal clear.
- Make it clear that you expect payment before Santa arrives.
As soon as you have finished your project or job, you should send your invoice, especially during the holiday season. Every day that your invoice is not getting paid costs you money. Send your invoice immediately and give your clients a chance to pay you in a timely manner.
Chase Your Overdue Invoices
Find some time before Christmas to look over your invoices and make a list of what clients have not paid you, then sort the invoices by the due date and by the biggest amount. You should chase the ones that have the biggest total amounts that are overdue.
Move to online invoicing
In such a digital world there are no excuses for not using online invoicing to speed up your payments. Even the most basic cloud accounting packages will give you the option to send your invoices to clients online via email.
Using online invoicing will speed up payment because:
- It removes the need for printing hard-copy invoices (as well as the time and cost of sending them in the post).
- It gets your invoice sent by email directly to the customer’s finance team (and removes the worry of your paper invoice getting lost or delayed in the Christmas post).
Set up Xero Invoice Reminders
If you are using Xero and have not started using the Xero Invoice Reminders now is the perfect time to start. Invoice reminders allow you to automatically send your customers an email reminder about their invoice. You will be able to remind them before or after it is due, your choice. And the message is fully customisable. Once you get it set up, you do not have to worry about it anymore, it does the chasing for you. We also recommend as part of your debt collecting process to send monthly statements and use the notes section under the client so you can review the history with the client.
Click here to learn more about Xero Invoice Reminders.