Three ways to get paid faster

We’re hearing a common story from many of the businesses we’re speaking with: work done, invoices sent, and then… crickets. More and more businesses are feeling the pinch of delayed debtor payments, and it’s becoming a critical issue.

When payments are delayed, it directly impacts your cash flow, leaving you profitable on paper but with an empty bank account. Not good fun.

Conversely, getting paid quickly ensures a healthy cashflow, which helps you:

• Pay your bills on time: Avoiding late fees and maintaining good relationships with your suppliers.
• Invest in growth opportunities: Freeing up funds to invest in new projects, equipment, or staff that can help your business expand.
• Reduce stress and disruption: Eliminating the worry and administrative burden of chasing late payments, allowing you to focus on running your business effectively.

It’s important to remember that extending credit should be based on trust and reliability. If you’re uncertain about a client’s ability to pay, request a deposit upfront.

There are ways to turn the tide and get paid faster. Here are three strategies you might like to consider.

1. Set up direct debits

Imagine not having to chase payments every month. Oh, the joy! By arranging for your clients to pay via direct debit, you can ensure that payments are made automatically on the due date. This not only saves time but also guarantees a steady cash flow, allowing you to focus on growing your business rather than managing receivables.

Direct debits are especially useful for businesses with regular, recurring clients. The setup is straightforward and can be easily managed through your bank or payment service provider.

2. Mobile EFTPOS and online payments

For businesses that provide on-site services, like tradespeople, consultants, or mobile mechanics, accepting payments on the spot can be a game changer. Mobile EFTPOS terminals and online payment solutions are perfect for this.

With mobile EFTPOS, you can process payments instantly using a portable card reader connected to your mobile or tablet. This not only speeds up the payment process but is also super convenient for clients.

Online payment gateways like Stripe and PayPal are another option. These can be integrated into Xero, allowing your clients to pay digitally with just a few clicks.

3. Pick up the phone

As a final back stop, nothing beats a phone call. While Xero can send out reminders, many people ignore these. A direct phone call is much harder to overlook.

If you have a new client or are expecting a large payment, give them a call five days before the payment is due to confirm that the invoice is loaded properly. Sometimes new clients have signed up with you but haven’t provided all the necessary information to their accounts team, causing delays.

For overdue payments, start with a friendly approach: “Hey, just wondering if you got that invoice? Was there any problem with it? Did you know it’s still outstanding?” Then confirm a payment date: “When can you sort this out?”

It’s important to address any excuses, such as someone being on holiday. Payments can still be made in their absence. Add the expected payment date to Xero and follow up the next day if the payment is not received.

If you need personalised guidance for getting paid faster in your business, don’t hesitate to reach out. We can help you implement tailored strategies to improve your cashflow.