The 5 Best Ways to Improve Billing and Collection Processes
by Caitlyn Rose on March 5, 2017

Read in 2 minutes

5-best-ways-to-improve-billing-and-collection-processes-lendgenius

There is something of a learning curve when it comes to financial processes. Even seemingly simple billing and collections processes will challenge most business owners at some point.

Account balance checks are no longer enough to ensure you receive payment in a timely manner, but there are things you can do to help bring in the payments you’re owed. And remember: If at any time you have outstanding invoices, you can always take out an invoice financing loan against the value of the invoices if you are in need of some fast cash.

In the meantime, we’ve outlined below a few of the best ways to optimize your billing practices:

Avoid Confusing Invoices

Your invoices should clearly state what was bought, what it costs, and the due date of the payment. Include other identifying information as necessary to make payment as convenient as possible for your customers. You may even want to give the option for multiple payment methods.

Finally, it is crucial to always make sure that invoice data is correct to encourage timely payment, but also to keep your brand untarnished in the eyes of your customers. By employing a software that matches invoice data with order data, you can cut down on discrepancies.

Don’t Delay Mailing Invoices

Invoices that get delayed aren’t going to be paid as quickly as those that are mailed in an orderly fashion after the sale. One of the best ways to combat this is by using electronic invoices through email.

You may encounter clients who don’t accept electronic invoices by policy. However, if even a small fraction of your billing can be done online, it will drastically improve the efficiency of collections.

Be Sure the Invoice Gets in the Proper Hands

It’s quite common for invoices to “go missing” before they arrive in the hands of the client. Perhaps the invoice was mailed to the wrong address within the business, or maybe it “requires special approval” by someone specific within the client’s company.

Frankly, these are usually just excuses for sending late payments. Still, you can avoid some of the runaround by doing your part to bill the appropriate contact from the start.

Provide Discounts

One way to help spur customers into making payments on time (or even early) is to offer discounts. Usually, a small percentage off the total invoice amount is enough to achieve this effect.

For larger clients or those who are more prone to miss payments, a cumulative discount could help prompt speedier payments. In these cases, the discount percent can increase with each successive on-time payment before finally plateauing.

Develop Positive Client Relationships

Your clients will be much more likely to make payments on time if they feel valued by your business. Providing attentive service, including after the sale, can show your clients that you care about their satisfaction.

During the follow-up communications, casually ask if they’ve received their invoice. While this will seem like a confirmation, it also subtly implies that payment is the next step. By promoting a positive relationship between you and the client, you instill a sense of trust in them that reflects back upon your business.

Top Articles

Featured Posts

Minority Business Loans – Discover 36 Opportunities Here

by Taylor Gordon on April 7, 2017
You may be searching for minority business loans because you have an idea for a great new business. Or perhaps… Read more

Small Business Loans for Veterans – A Definitive Guide to VA Business Loans in 2017

by Eric Goldschein on April 7, 2017
Small business loans for veterans are available through various channels and are also often supplemented with business development tools. Business… Read more

Small Business Loans for Women – Compare 38 Options in One Place

by Rebecca Hosley on April 4, 2017
When it comes to small business loans for women, knowledge is power. Women are not new to entrepreneurship, but they… Read more

Trump Pick Linda McMahon Has HUGE Plans for the SBA

by Eric Goldschein on February 17, 2017
Linda McMahon, Donald Trump’s pick to head the Small Business Administration, isn’t exactly synonymous with the word “small.” Along with… Read more

Business Owners: 5 Truths Your Banker Doesn’t Want You Knowing

by Jackie Lam on February 17, 2017
When looking for the best banks for small business loans, Bank of America and Wells Fargo may come to mind. However,… Read more

A Complete Declassified List of Tax-Exempt Fringe Benefits

by Amy Fontinelle on January 30, 2017
With all the uncertainty surrounding Trump's tax plan, tax saving tips for small business owners are as important as ever. Finding… Read more

6 Bad Habits to Break for Gigantic Business Growth in 2017

by Lauren Ward on January 24, 2017
As an entrepreneur or small business owner, the New Year is the perfect time to take a step back and… Read more

9 Cloud-Based Tools to Solve All Your Small Business Accounting Needs

by Caitlyn Rose on September 19, 2015
 As a hard-working entrepreneur, you should already know how important it is to keep a careful watch over every penny coming… Read more
Trending

SBA Loans: The Ultimate Guide to Government Lending

by Amy Fontinelle on February 7, 2017
Small business loans through the SBA fall under several categories and while they all have slightly different requirements, there's a few universal… Read more

An Epic Guide to Business Credit Cards, Charge Cards, & Lines of Credit

by Eric Goldschein on February 2, 2017
If you’re a small business owner, you know how important it is to always have extra capital on hand so you… Read more

The Trump Presidency & Your Small Business – What You Need To Know

by Eric Goldschein on January 19, 2017
As Donald Trump takes office, small business owners everywhere are wondering what to expect from the 45th president. While Trump’s small… Read more

5 Advertising Tools to Help Your Small Business Grow

by Ronis Gracie on September 11, 2016
If you would like your small business to flourish and grow, you need to offer unique products or services that… Read more
Learn More