In a small limited company cashflow can be a huge problem and as much as you hate policing your invoices it is a vital component of your company. In this blog I’m going to share some tips that can make a world of difference to your company.
Know your customer
If you are dealing with smaller companies take some responsibility and have a look to see if they are going to be paying the bills on time. Have a look at Companies House and see what the owner has to their name, if they have a few dissolved businesses, maybe be a little more cautious and vigilant. The appropriate credit checks will also give you a good idea.
Use a more detailed invoice so that your client knows exactly what they are receiving. When the client can see what they are getting clearly they know what they are paying for and reduce the amount of queries, however, if it is a complicated and long invoice or summarised invoice they may be confused what they are actually receiving off you.
Keep control of cashflow
Waiting around to send invoices will affect your cash flow. If you take longer to send the invoices off then the longer it will be until they are paid. No invoice no money! Something else to consider when sending off your invoices is providing different ways to pay. If you give them many different options it makes their life less stressful as they can do whatever is easier for them, whether that is PayPal, credit card or BACS. Something that you can take into consideration is the clients payment run – not all businesses have a payment run however if they do I suggest that you set the invoice date to then.
One of the most important things that you need to do when invoicing is setting payment terms whether that may be immediately or within a month. Once you have set a payment term with your clients you can track the invoices. Tracking is important as it means that you are making sure that you are getting paid. It would be very easy to lose track of whether you are being paid or not which will mean your cashflow is going to crash. No matter how big or small the list of companies that you are invoicing it is highly recommended that you get an invoicing management system – there are plenty out there it is just a case of finding the right one.
I hope that these tips have helped you come to terms with keeping on top of your cashflow so that you can keep growing your business. If you need any further help with this please do not hesitate to get in touch so that we can help you.
Oliver Moir-AndrewsAccounts Assistant
After working towards his AAT Oliver would like to become chartered. At the weekend Oliver likes to play rugby and socialise with friends.