Essential Payment & Invoicing Tips for New Businesses
Launching a new business venture? Business cashflow depends on prompt payment. More than half of UK businesses struggle with overdue bills, with an estimated £44bn in late payments outstanding. Avoid common cash flow mistakes by following these simple payment and invoicing tips.
Set clear payment terms
Your payment terms should be crystal clear. Discuss your requirements and ensure your clients sign a contract before you begin providing services to ensure that there is no confusion in the future. Decide the length of payment terms you will offer. According to Xero’s survey of over 1,500 business owners in the UK, 70-80% give two weeks’ notice or less, and more than half request payment within seven days.
It’s all too easy to forget to send invoices to clients after submitting work or providing a service. Try to set a specific day or afternoon aside each week to tackle bookkeeping and invoices. This way, you’ll be able to plan around the time you need to address billing requirements. You’ll be far less likely to overlook invoicing when you have allocated time for dealing with the task. Don’t forget to chase up outstanding invoices too.
Make it easy for your customers to pay
Late payments are crippling small businesses in the UK. However, offering your customers a range of convenient payment options could help you speed up the payment process and help you avoid late payments. Get paid sooner by accepting payments from online payment services.
Use technology to help
Running a business can be incredibly time consuming. From attracting new clients and customers to managing staff and finding time for meetings, the work of a business owner is never done. Unfortunately, invoicing is often one task that gets pushed further and further down the ‘to-do’ list when we’re busy. Luckily, there are now plenty of apps and tech tools to help. Xero has a great online invoicing feature, and there are dozens of useful invoicing add-ons available too.
Offer an incentive for fast payment
Strict payment terms and prompt payment discounts can encourage customers to pay up faster.
Seek expert advice
Getting started with cash flow management isn’t always plain sailing. That’s why it’s important to seek expert financial advice early on. Consider seeking out business start-up support and business planning services to help you get on the right track in the early days of your business. It is important to build your business on solid financial foundations, and an experienced accountant or financial advisor will be able to help you gain the skills necessary for long-term success.
Financial services from UWM
If you need help with managing cash flow, get in touch with UWM. We’ve been helping UK businesses and start-ups improve cash flow for over 30 years. For more information about our bookkeeping services, get in touch today. Call 0113 231 0202 or send your enquiry online.