December 02 2022
The best gift you can give yourself this year is the gift of good cashflow. Christmas and especially year-end can be a good natural deadline for getting your customers to pay you.
Small business suppliers are being left empty-handed as new data reveals almost one in four big businesses takes more than 120 days to pay their invoices. The Business Council has a 30-day payment goal, but seven out of 10 big businesses are failing to meet the benchmark, according to the Payment Times Reporting Regulator.
Late payments are a huge problem for SMEs and sole traders, with almost half being paid late — on average 6.4 days late causing a knock-on effect for businesses who need to pay their own bills.
Here’s a few tips to help you get paid on time and help improve your cashflow:
1. Send invoices early!
It might sound obvious, but most accounts are dealt with at the end of the month. But as we creep up to Christmas and with Christmas being on a Saturday this year, most businesses will be wanting to close the month’s books by Friday 23rd December — so make sure your invoices arrive early or mid-December to get prioritised.
2. Send invoices online.
Sending invoices via post or by hand leaves you open to either them getting lost in the mail, or someone losing a piece of paper.
bzTrack is now completely free to use and makes invoicing and keeping track of when you’re going to be paid (plus what bills need paying) really simple. You can create a free account at https://www.bztrack.com/signup either as an individual or a business using your ABN. It takes a few seconds and from your Dashboard you’ll be able to add contacts/companies you trade with, send and receive invoices and pay bills within seconds without having to keep re-entering your bank details once you’ve signed up. Simple!
3. Encourage early payment.
It goes without saying that some customers are always going to pay you late — whether it’s due to lack of organisation, or lack of cashflow on their end, it shouldn’t be something that impacts your business and cashflow. With bzTrack, you can create Invoice Discount Templates where you offer a customer x% off an invoice if they pay within a certain timeframe. That could be 5 days before payment is normally due, or within x amount of days from the time of invoice. You can customise the templates for specific businesses or customers, or create a special one that goes to everyone for the holiday period. — they’re simple to set up and can be accessed from the menu bar once you’re logged in.
4. Think about setting up Direct Debits.
You’ll be in a much better position to understand exactly when you’re going to get paid plus you won’t have to keep chasing customers each month and wasting time on phone calls and emails when you could be focusing on running your business.
5. Finally but most importantly — get to know who you’re dealing with.
If you’ve created a great relationship over the course of the year with the accounts person, you’re in a much stronger position to get paid on time!
Head to www.bztrack.com to find out more about how we can help your business manage its cash flow and get paid on time!
