In business, cash is king, so having predictable cashflow is essential. I have heard of people working all night to deliver a product or service to a customer. But I have never heard of an organization staying up all night to deliver an invoice to a client.
To improve a business’s cashflow, typically one of the first questions I ask as a Business Coach is, “What is your invoicing process?”
Here are some key questions to ask yourself…
- Is the invoice delivered with the goods or service?
- How many times do I say, “I’ll send you the bill.”
- Do I leave invoicing to the end of the month?
Many companies, particularly bigger ones, have cut off days for monthly payments. So if you miss delivering the invoice for the current months cut off date by one day, it may be 30, 40, or even 60 days before you get paid. Why let money sit in someone else’s bank account.
- What does it say on the bottom of our invoice or statement?
If you give people 30 days to pay, they will take 40. What impact would it have if your invoices said “Due on receipt.”
To improve your cashflow, make collecting the money from your customers as important as meeting and delivering their needs. It’s important to your business.