5 Cash Flow Killers to Avoid

Cash Flow Killers

Nothing kills your cash flow more than non-payment or slow paying customers.  No matter how well you serve them or how good your company performs, some people simply take their time paying you.  But all too often, it’s mistakes or other issues that really create the problem.

What Creates Slow Paying Customers

Errors on invoices.  Miscalculations or other errors give the customer a reason not to pay you.  To make matters worse, some won’t call to let you know.  They simply won’t pay it and wait for you to contact them.  What a great way to turn 30-day terms into 60 or 90!

Slow invoicing.  Today there is absolutely no reason to invoice weekly or worse, monthly.  When the project or service is complete, send out the invoice.  Financial management systems like Quick Books make it easy.  And now you can do it from anywhere, including your phone!

Lack of payment options.   Cash is great.  Checks work too.  But credit cards and EFT options are a simple way to get paid today.  Stop worrying about the fees.  You don’t even need a credit card transaction machine. With applications like Square, your phone or tablet can make accepting credit cards easy and convenient for you and customers. Payment today, even with the fees, beats waiting 30 days or more – and you eliminate the chasing!

Poor collection follow-up.  Again, technology makes it easy and reminds you immediately when something is past due.  No need to wait 30 days to take action.  Send a friendly reminder the day after a payment is due — if it’s not received. When customers know you are on top of it, they are far more likely to pay sooner than later.

Serving everyone.  Choose your customers wisely.  Negotiating is fine and expected.  But avoid the ‘hagglers’.  If they quibble over the quote for a few bucks, they will likely do the same when it’s time to pay the bill – once again, delaying the payment.

While it is difficult to eliminate slow or non-payments, you can certainly improve the results with a good system, flexible payment options, and consistent follow-up.

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