Did you know that a business could have a record year in terms of revenue, but still not have any cash to show for it? When you lose sight of the big picture, increasing sales can hide serious cash flow problems.
The number one culprit here is customers who don’t pay their invoices on time. Although a business may be happy with the sale, it may have to wait a few extra months to actually receive the money from it. A few late payers can really damage your cash flow.
According to this Entrepreneur article, this problem typically affects small businesses since they don’t have late-payment penalties in place:
“Sadly, small businesses that don’t have solid late-payment penalties and collections policies in place are often taken advantage of. If your clients don’t know for sure that they’ll hear from you the moment a payment is late, you’re sure to be the last of their vendors to get paid.”
One solution to this problem is to update your policy and install a new late-payment penalty. Let customers know that if they miss the due date, they’re going to get hit with a small penalty.
But this doesn’t do anything to solve the other issue behind this problem, which is that businesses have to track who’s paying on time and who’s missing their payments. If you do this manually, you’re bound to let a few invoices slip through the crack.
That’s where marketing automation software comes into place. The software will format and send invoices to customers for you and allow them to pay online. You’ll have to deal with fewer late payments and the ones that persist will be easier to track and deal with.
To talk more about getting paid faster with marketing software, or anything else, contact us today.