The financial year is coming to an end and now is the time to settle those unpaid invoices and prevent a bookkeeping headache come tax season. Chris Rich, Head of Customer Success at Square Australia provides his top tips to get ahead.
Australian payment times have been identified among some of the worst in the world, with invoices paid on average 27 days late. We know this isn’t good enough, and while there are many voices in the business community advocating to change this, right now it’s up to you to take action and make sure your business goes into the new financial year on top.
Here are five ways you can improve your invoicing process and maximise your chances of getting paid on time this end of financial year.
Send instant e-invoices
If you don’t already have one, sign your business up to an e-invoicing app stat. Businesses that are enabled to send invoices on the spot, as soon as the work is complete, save valuable time after hours. E-invoicing tools and apps can get you paid up to 80 per cent faster when compared to traditional processes (such as calculating and formatting an invoice in Excel).
Getting into a good routine with invoices is important when it comes to making sure you get paid. Be consistent with sending your invoices instantly to your customers so they get familiar with when you expect payment.
Make it easy for customers to pay
Everyone is busy these days, so when it comes to asking for payments you want to make it is as quick and seamless as possible for your customers. Some online invoicing tools, like Square’s standalone Invoicing App, can help you send unlimited e-invoices straight from your phone, and your customers can then select to pay you quickly and securely — without having to log into their banking app!
Our data shows that in the past 12 months, 48% of invoices processed through Square online were paid within one day, with all invoices, on average, paid within 6 days. Making it easy for your customers to pay is key to getting paid on time.
Include payment terms up-front
All good business relationships are built on clear communication. When you’re engaging your customers, ensure that you let them know exactly when payment will be expected. It’s always a good idea to communicate due dates for payment in writing via email and then again in a quote — and finally in the invoice itself.
If you have a paper trail of your payment terms, it makes it much easier to follow-up late payments with customers.
Send a quote
A common reason for late payments when it comes to invoices is disputes over the invoiced amount. By providing a quote in advance you can ensure there are no surprises when the invoice lands in your customer’s inbox. Some digital invoicing apps even enable you to send a quote via email that your client can then approve, allowing you to instantly convert that approval into invoice.
Setup automatic reminders
Chasing invoices can be a big hassle — and it takes up time that you could otherwise be spending on other parts of your business. Look for an invoicing tool that allows you to send automatic reminders ahead of the due date.
More often than not your customers may have simply forgotten the payment date, so sending a well-timed reminder is a great way to make sure you get that payment across the line on time.