Skip to main content

The Small Business Guide to Getting Paid Faster: Boost Your Cash Flow Today

By 03/03/2023June 22nd, 2023No Comments
The Small Business Guide to Getting Paid Faster

Hey there, small business owners! We all know how important cash flow is for a small business and ensuring you get paid faster as a small business is a great way to improve it. In this blog post, we’re going to provide advice on why you should be looking to reduce your payment terms & raise your sales invoices straight away. We also discuss making it easy as possible for customers to pay you. And finally we’ll touch on implementing software to keep on top of debts. By reading this article, hopefully you’ll leave this article with plenty of ideas of how to get cash into your company faster and improve your cash flow.

Reduce Your Payment Terms to Get Paid Faster as a Small Business

If you’re a small business owner, you might have fallen into the trap of giving your customers 30 days to pay invoices. It’s common for business owners to offer 30-day credit terms because everyone else does. However, credit terms should only be given if the customer asks for them and is placing regular orders.

Think about it: if you give your customers 30 days to pay an invoice, that means you won’t see that cash for at least a month. Have you got deep enough pockets to deal with that? If so, that’s great. But for smaller businesses, or even those just starting up, it might not sound like the best idea. 

Let us try to reframe your thinking here. It’s certainly helped us to reimagine our collections process. You dont have to come at your finances from a “30-day world”. This is where you assume your customer wants 30 days to pay before trying to talk them down. Why not approach it from a “prepaid” perspective. Let your customers know as part of the sales agreement that it’s payment in advance. You’ll likely be surprised how many clients are simply onboard with this from the get go. And oftentimes the sale is already in the bag before you begin to talk about collections! So it’s very unlikely to cost you sales in the short OR long term.

By reducing your payment terms, you can get paid faster as a small business. You can boost your cash flow and reinvest that money into your business. So, why not give it a try and see the benefits for yourself?

Raise Sales Invoices Straight Away: The Key to Getting Paid Faster

As a small business owner, it’s common sense to invoice your clients as soon as possible. However, it’s surprising how many businesses forget to do this or delay it unnecessarily. Remember, your clients are already expecting an invoice! Don’t feel bad about issuing one right away. It’s a great way to ensure you get paid faster as a small business that people tend to overlook.

When you raise invoices straight away, you’re providing clarity and transparency to your clients. But you are also speeding up the payment process. This is because it gives your clients ample time to process and pay their bills. Helping you to get cash into the company faster.

For instance, let’s say you’ve completed a project but you wait a week before sending them an invoice. Your client then has to go through their own internal approval process. This may take another week. By the time they actually pay you, it could be more than a month after your agreed terms. And you don’t really have a leg to stand on – it was your delay that started it! If only you’d sent the invoice straight away… Your client could have processed it immediately, and you’d have received the payment faster.

So, if you’re not already raising sales invoices straight away, it’s time to start doing so. The benefits to your cash flow and your business’s financial stability are significant. It can be a good idea to make it a defined part of your sales process. It will act as a reminder to you when it’s the most important!

Make it Easy for Customers to Pay You: Tips for Boosting Your Cash Flow

It’s not just about sending invoices on time. It’s also about ensuring that your customers can pay you easily and without any obstacles. The easier it is for them to pay, the faster you’ll receive your cash. So, how can you make it easy for your customers to pay you?

  • Include multiple payment options on your invoices: One of the most effective ways to make it easy for your customers to pay you is by adding payment options to your invoices. Consider including a “Pay Now” button or a QR code that links to an online payment gateway. This makes it easy for customers to pay you directly from the invoice. They don’t need to log in to their online banking or remember your bank details.
  • Offer multiple payment methods: Different customers prefer different payment methods. It’s always a good idea to offer a variety of payment options. This could include credit and debit cards, PayPal, direct debit, and bank transfer.
  • Set up recurring payments: If you have customers who pay you on a regular basis, consider setting up recurring payments. This saves them time and effort, and ensures that you receive your payments on time, every time.
  • Use accounting software: Using accounting software like Xero or QuickBooks can streamline your payment processes. They make it easier for customers to pay you. These platforms often offer invoicing templates that include payment options, and can automatically send payment reminders to customers.

Remember, your customers expect to pay you for the goods or services you provide. Don’t feel bad about issuing invoices promptly and including payment options. Making it easy for customers to pay you is not only good for your cash flow, but also for building strong customer relationships.

In the next section, we’ll discuss how software can help you stay on top of your outstanding invoices and reduce the amount of time you spend chasing payments.

Looking for business accountancy services

Use Software to Speed Up Collections and Get Paid Faster as a Small Business

Using software can help you manage your accounts receivable. They are also good for streamlining your invoicing process and ensuring you get paid faster. Here are some examples of software that can help:

  • Accounting software: It’s almost assumed these days that you will be using accounting software such as Xero or Quickbooks. But if you’re not – get going! Many accounting software programs allow you to create and send invoices directly. Saving you time and reducing errors, as you won’t need to manually enter data into a separate invoicing program.
  • Payment processors: There are many payment processors available that integrate with accounting software. They normally offer features like recurring payments, payment reminders, and automatic payment processing. A simple card machine is no longer the only option!
  • Automated invoice chasing: Software like Chaser can automatically send out reminders to customers who have overdue invoices, freeing up your time and ensuring that you get paid faster. Sometimes all customers need is a simple reminder.
  • Mobile payments: Many customers prefer to pay using their mobile devices, so offering mobile payment options can help reduce friction and make it easier for them to pay you. Whether it is Apple Pay, or something similar, simply providing customers with something that they can complete quickly on their phone is a great idea.

By reducing the amount of time you spend managing your accounts receivable, you can get paid faster. Consider exploring the various options available to find the one that works best for your business.

The Impact of Late Payments and Why You Need to Get Paid Faster as a Small Business

As a small business owner, you probably have plenty on your plate already. Late payments can create an additional level of stress and anxiety. This can ultimately lead to decreased productivity and poor decision-making. Getting paid faster should be a priority!

Not only can late payments lead to financial stress, but they can also have a real impact on the growth of your business. When payments are late, it can be difficult to manage cash flow. Pay your bills gets harder, and it’s harder invest in your business. This can result in missed opportunities, delayed projects, and even lost business.

But don’t worry, there are plenty of ways to prevent late payments from becoming a major issue. By implementing the tips we’ve discussed in this post, you’ll be able to stay on top of your accounts receivable and get paid faster.

It’s important to remember that the goal here is not to make your life more difficult. In fact, by making it easier for your customers to pay you, you’re likely to see an improvement in your overall customer experience. Customers appreciate businesses that make it simple and straightforward to pay their bills, and they’re more likely to return as a result.

By putting these tips into practice, you’ll be able to improve your cash flow, reduce your stress levels, and ultimately grow your business. So, don’t wait any longer – start implementing these changes today and see the benefits for yourself!

Conclusion – You Can Act Right Now!

As a small business owner, you’re always looking for ways to improve your cash flow. One of the simplest ways to do this is to get paid faster. In the past, finance departments used to be cumbersome. Not these days! There are many tools available to help you get paid faster as a small business.

Lets recap what we’ve discussed: 

  1. Reducing your payment terms is one of the most effective ways to get paid faster as a small business. Instead of giving your customers 30 days to pay invoices, try reducing your payment terms to 7 days or even better, take payment upfront. Many business owners give 30 days because everyone else does, but credit terms should only be given if the customer asks for them and is placing regular orders, backed up by references and checked on credit checking software like Experian.
  2. Raising sales invoices straight away is another simple solution. Clients can’t pay you if they don’t know what they’re paying for, so make sure to issue your invoices right away. Don’t worry about issuing an invoice immediately – your clients already expect it.
  3. Making it easy for customers to pay you is also crucial. Add a “Pay Now” button to your online invoices to collect payment easily. Offer several payment methods like card, PayPal, bank transfer, direct debit, etc. to reduce friction on the payment of your invoices. This will make it more likely that your customers will pay you quickly.
  4. Software can also be used to speed up collections and reduce friction. Tools like Chaser can be used to auto-chase outstanding invoices, prompting payment and saving time for small business owners.
  5. Finally, it’s important to remember the impact of not getting paid in a timely manner. Late payments can cause cash flow issues, making it difficult to pay your bills on time or invest in your business’s growth. Implementing these simple solutions will help you get paid faster, which will boost your cash flow and enable you to grow your business.

If you’re looking to improve your cash flow, implement some of the suggestions we’ve made in this article, and need some expert assistance, don’t hesitate to get in touch with us at Direct Peak Accountants. We have a wealth of experience in helping small businesses like yours get paid faster and improve their overall financial health. 

As a tech-savvy firm, we’ve tried and tested various options – including the bad ones, trust us! – so we are very well placed to provide you with the best solution for your specific needs. Contact us today and let’s discuss how we can help you boost your cash flow and improve your financial standing..

Steve Marshall
Steve Marshall
The whole team at Direct Peak have been amazing to work with. Everything we have been looking for from an accountant. Thank you from Acoustic Associates
Luke Tyler
Luke Tyler
The Direct Peak team are exceptional in all they do. They demystify my questions on accounting, offer clear, sound advice, and help me to make informed decisions about my business.
Don Wiid
Don Wiid
Karl Newman and his team help us with our Xero accounts system, making sure it is accurate and up to date. The real value though, is Karl's experience as a management accountant, providing indispensable advice on a monthly basis to ensure we keep growing.
Craig Sawyer
Craig Sawyer
Direct Peak are the perfect accountants for me. Always helpful and friendly. They take away any of my accountancy headaches which allows me the time to focus on my business. Would highly recommend them and do to any business owners I can. Thank you all !
Kelsey Brace
Kelsey Brace
I've worked with Karl & Direct Peak for years. They have always provided great service and advice. Highly recommeded!
Sana Hanassi-Savari
Sana Hanassi-Savari
Great service, I would highly recommend them. The team are friendly, always around to help and very knowledgable.
Simply Antivirus
Simply Antivirus
Direct Peak was the right choice for us. Outstanding friendly service. The team are highly knowledgeable regarding tax and financial matters, and they have been an asset to the running of our business. Very approachable and have an answer to all my questions. Highly recommend them! Very well done guys!
catherine Johnson
catherine Johnson
I recently changed my Accounting to Direct Peak, mainly due to Karls brilliant support with advice regarding making Tax Digital and around my business growth intentions. Having run my own small business and being with my previous accountant for 13 years, I have been SUPER impressed with every aspect of the move - the advice, the support, and mostly the friendliness of the team and their willingness to want to help. Eve has been so amazing at supporting me to make the transition to Digital VAT returns - I cannot recommend Karl and his team at Direct Peak highly enough - Thanks Guys!
Peter Baker
Peter Baker
Karl has been outstandingly patient and generous with his time. I cannot recommended Karl enough. He has helped massively in starting up my own company.
Click Here

Dedicated Contact

Direct Peak provides a dedicated business tax accountant, who will prepare your annual accounts and tax returns. They will be on hand to answer any tax queries you have.

Click Here

Tax Efficient

Your business tax accountant will ensure that the company is set up in the most tax-efficient way and that you are claiming for all the correct expenses to maximise your earnings.

Click Here

Quick Turnaround

We aim to turn around the annual accounts and tax returns quickly to give you visibility of your tax bill well in advance of it being due.