This simple accounts receivable process is what I used in my small business. This cycle made sure that our customers always paid us on time, every time.
In any company cash is the life-blood. Not much can happen without cash flowing into the business, so it’s about as important as it gets to get invoices paid on time. It can be the difference between success and failure.
I know how it feels not to get invoices paid on time. My business (and I) almost went broke before I devised this accounts receivable process to get our invoices paid by the due date
IT WAS SO MUCH EASIER WHEN INVOICES WERE PAID ON TIME. IT:
- Reduced anger and frustration and so…
- Reduced my stress and so…
- I could focus on growing my business – not chasing overdue accounts
- Reduced the need to get an overdrafts or loans
- Gave me a much better chance of making bigger profits
HERE’S MY ACCOUNTS RECEIVABLE PROCESS PROVEN TO:
- Get Invoices paid by the due date AND
- Improve relationship building with customers AND
- Encourage repeat business AND
- Get new business referred to you AND
- Never having to chase overdue invoices again
It’s Proven. Getting paid on time was such a relief to me and it can be for you.
ACCOUNTS RECEIVABLE PROCESS – KEY POINT:
Split the time you allocate to your accounts receivable process over at least two days.
I’m using Tuesday and Thursday in my example of the weekly accounts receivable process. Preferably leave a day in between the days you choose.
THE WEEKLY COLLECTIONS CYCLE: 3 MAIN POINTS
#1 Make a ‘courtesy call’ 7-10 days after sending an invoice. A ‘courtesy call’ is a customer service call to confirm:
- Safe delivery of the goods or service AND
- To ask the customer to confirm that the invoice is correct.
#2 Take notes of conversations and agreements. Knowledge is power!
#3 When making a courtesy call, follow up any older invoices where you don’t yet know the payment status.
Here is an example using 1 invoice called Blue Invoice No 123. I’ve allocated Blue Invoice 123 an ‘incorrect calculation’ error just to show how you can get invoices with errors paid on time too
Here’s the collection process of Blue Invoice 123 in more detail:
To see how this works with multiple invoices, let’s add in a second invoice Red Invoice No. 456.
This invoice also has a query that needs to be resolved:
We can follow the collection process of Red Invoice No. 456 in more detail here:
GET INVOICES PAID BY THE DUE DATE IN 4 SIMPLE STEPS:
Just follow this accounts receivable collection checklist every Tuesday and Thursday:
GET INVOICES PAID N TIME – JUST BY USING YOUR CUSTOMER SERVICE SKILLS
100% Proven over 15 years. It worked for me and will work for you
This is the exact collections strategy I used in my small business. and customers paid by the due date.
Because our invoices were paid on time I never had to apply for a loan. The business was always self-funded.
This strategy helped us serve our customers better. We provided outstanding service by resolving queries quickly and seamlessly which helped build our reputation as an outstanding service provider.
Being an outstanding service provider meant that our customers became ‘Raving Fans‘. They gave us repeat business and referred us to other organisations. That was a very cost-effective way to grow the business.
You might like to adapt accounts receivable process to suit your business – but don’t change it too much. This really works.
WORRIED YOU’LL UPSET YOUR CUSTOMERS? DON’T BE…
On the odd time that we were asked by a customer if we were chasing payment early we had a standard phrase:
“Oh no of course not. We’re just making sure that our invoice is correct and that you have everything you need. Payment isn’t due until …
We never lost a customer using this strategy.
SMALL BUSINESS COLLECTIONS STRATEGY – KEY ACTIONS:
#1 Schedule the best days and times to make your courtesy calls each week.
#2 Print out your ‘days receivable outstanding’ or invoice ageing report. Make sure it shows all the invoice details you’ll need.
#3 Call your biggest and best customers first. Practice on customers that you have the best relationships with first before tackling customers you don’t know so well.
#4 Set a few small SMART goals and targets.
- Be Specific. Choose specific customers – or specific amounts.
- Make it Measurable. List a specific amount to collect for this week.
- Be Action Oriented. Decide what actions you need to take to get invoices paid
- Be Realistic. Following a new strategy takes a bit of time. Set small achievable goals
- Give a Time frame. Give yourself a realistic deadlines
And when you get paid, celebrate your success. Getting invoices paid on time and having strong cash-flow made running my business much less stressful. It could make yours less stressful too.
If you are a small business owner, let me know about your accounts receivable process successes and challenges. I want to help you get paid!
Are Late-Paying Customers Driving You Crazy And Sending You Broke?
Do you want increased cash flow, bigger profits and less stress?
If you do, discover how easy it is to get all your invoices paid just by asking for payment politely - In the Get Paid! eCourse