Here is my one paragraph solution to improving the cash flow of a business overnight. Its simple, easy and costs almost nothing. So here it is...
Never shall
the sun go down
on completed work without an invoice going out.
It is a mantra that should be learnt and repeated often in the work place!
You might want to copy and past it into your word processor and print it out. I often do this for new clients with cash flow problems and put it in a picture frame prominently in their office. It's all about shortening the billing cycle for businesses that generate work over a number of days, weeks or months. The quicker you get an invoice to a client the shorter the amount of time before the money is in the bank. Remember if its not in the mail its not a sale - meaning only when the money is in your bank can you consider the sales transaction truly complete.
Getting an invoice to the client sooner also sends a message that you expect payment on time. One client I helped recently in this area now includes an invoice with the reports (effectively the product) the company produces. In the past the invoice was sent separately days, weeks, months and sometime never! Most payments now come in around seven days after the client received their product.
Till next time!
Wayne Moran is the managing
director of Jacem Business Development Pty Ltd. Jacem’s mission is to
help businesses grow through a range of business services in marketing,
business process re-engineering, information technology adoption, succession
planning, project management training, staff performance and development as
well as thinking & creativity training. Wayne can be contacted directly on
0418 153 063.