Clearly, keeping up with customer payments is important when you’re running a business. Prompt payments help you maintain steady cash flow, cover expenses, and make accounting easier. If done right, the payment process can be a positive experience for both you and your customer.
Invoicing is a key touchpoint with your customers, yet business owners sometimes forget to treat it like one. These accounting tips will help you create a better customer payment experience — not to mention you’ll probably get paid faster.
5 Business Accounting Tips to Help You Get Paid Faster
Include Key Information
Creating a clear, simple invoice is the first step to getting paid faster. There a few basic elements you definitely need to include on your invoice:
- Your company name and contact info (phone, address, email)
- Client’s company name, contact info, and specific contact person
- Invoice number
- Amount due
- Payment due date
- Payment options and payment instructions
Beyond this, you might include a brief description of the services provided. Keep your design clean and streamlined so people don’t have to hunt down the information they need in order to pay you.
Leverage Your Brand
Beyond being a record of key payment information, your invoice should be a reflection of your brand.
QuickBooks, Xero, Wave, and most other accounting tools allow you to easily create custom invoices. Infuse your brand into the payment experience by adding your logo, colors, tagline, website, and links to social media profiles to your invoice. You can even add your tone of voice by customizing the email that goes out with the invoice.
This improves user experience by making your invoices stand out while also reinforcing your brand identity. A plain, boring invoice is much easier to lose track of than one that is instantly recognizable as coming from you.
Provide Flexible Payment Options
The more payment options you give your clients, the better. It makes the process easier for them, which means you will get paid faster. Win-win.
Most people expect to pay your invoice electronically. Setting up online payment is easy via QuickBooks Online or other payment portals—you have the option to accept credit card payment, bank transfer (ACH), and PayPal. In most cases, the money goes straight to your bank account and your bookkeeping software automatically records the income.
ACH is free or cheap, while credit card merchants charge a transaction fee. So, a good strategy to reduce processing fees, is to offer ACH by default and turn on the credit card option only if a client asks. You can use the system and the payment instructions section of your invoice to steer clients toward your preferred payment option. If you can afford to be flexible, however, it often results in faster payments.
Use Reporting to Track Outstanding Invoices
Reporting is your friend when it comes to tracking outstanding payments. The accounts receivable (A/R) aging summary is a record of all unpaid invoices along with how many days they are overdue. The A/R aging report can help you understand your current and future cash flow position and lets you know which clients to reach out to.
For optimal cash flow, you should run the A/R aging summary and follow up on (at least) a monthly basis. Most accounting software packages allow you to schedule periodic A/R aging reports automatically, which you can export to Excel or PDF. To view any individual invoice from the summary, use the A/R Aging detail report.
Follow Up On Late Payments
If a client’s invoice is past due, don’t hesitate to follow up with them. In many instances, people are either busy or they forgot, so they appreciate the heads up.
QuickBooks lets you customize and send automated reminder emails based on your A/R reports, which is a huge time saver. Keep in mind that automated reminder emails may end up in your client’s spam or promotions folder. For this reason, following up on a late payment sometimes requires a more personal touch.
Here’s the follow-up sequence we usually recommend:
1. Send out automated, bulk reminders to everyone with past due invoices (on the A/R aging summary in any column other than “Current”).
2. One week later, manually send a follow-up email to anyone who didn’t respond or settle their bill. Be sure to include a link to the invoice.
3. Still no response… Pick up the phone and call. Be polite:)
Combining these tips will help you get paid faster, avoid headaches, and hopefully improve the experience for your customers, too.
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