By Evan Vitale
As a small business, we want to to maintain positive cash flow and collect our accounts receivables (debtors) as quickly as possible.
Here are some tips that can help:
* Streamline the process from shipping to billing and get your invoices done quicker.
* Talk to customers who are consistently late in paying invoices. Consider offering them terms (for example, pay one-half of the invoice now and one-half at a later date).
* Offer discounts for early payment (for example, 2% discount, net 10 days).
* If you fear a customer may default on their invoice, contact them immediately and discuss ways you can help them pay sooner. A late payment is better than no payment at all. Perhaps, the customer is struggling with cash flow problems or other factors. Try everything you can to keep this customer on board. They’ll appreciate it and may refer you to other potential customers.
* Give consideration to accepting payments by credit card. Despite credit card processing fees, you’ll get your cash quicker.
* Consider factoring. This allows you to borrow against your debtors ledger (see “What is Factoring?” blog post).
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