Getting paid on time is one of the biggest challenges faced by small business owners.
As if building a great reputation, creating a stellar client list and securing sales isn’t hard enough — sometimes weeks go by and you still find yourself waiting for the money to appear in your bank account.
Last year, data from MarketInvoice showed that getting paid in Australia is especially difficult, with clients paying an average of 26 days after the due date. The report showed that late payments were suffocating small businesses, with over $19 billion locked away in outstanding invoices globally.
And while there are many advocates out there — including the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) and the Business Council of Australia — working to get governments to implement regulatory frameworks that ensure you get paid faster, change won’t come in time for the 2017–2018 financial year.
However, that doesn’t mean there’s nothing you can do. There are many new business tools and technologies designed to help you take back control and implement clever steps to improve your point-of-sale and invoicing processes.
Here are our top four tips to help you get paid faster this financial year:
Start sending simpler, more user-friendly e-invoices.
Don’t spend hours manually writing up and mailing out invoices only to then have to chase after them for payment. Use online tools to send invoices as soon as possible. The sooner your customers receive an invoice, the sooner they are likely to pay you. E-invoices also make it simple for your customers to pay you quickly and securely directly from the invoice. This saves them the fuss of having to log in to their online banking platform and prevents a payment lag.
Use online payment tools to your advantage.
As any business owner knows all too well, customers don’t like waiting. If they want to buy your product or service, they want to buy it now. So don’t let lack of access to hardware hold you back. Businesses can now use online payment platforms, such as Square Virtual Terminal, which allow you to enter a customer’s credit or debit card information straight into a web browser, making payments over the phone easier than ever.
Accept new types of payment.
Mobile wallet payments are starting to take off in Australia. Samsung announced last week that almost two million more Australians will now be able to use Samsung Pay with the addition of 38 more banks and credit unions added to the smartphone and smartwatch payment service.
This is a huge number of potential new customers for your business. If you want to stay competitive and cater to your customers’ preferences, accepting mobile wallet payments is crucial. Many credit card readers and EFTPOS terminals in Australia are setup to accept this new form of payment, so make sure that yours is too—whether you’re selling at the counter or on the road.
Use data to assess your payment processes.
Use data and analytics tools to gain important insights into what’s working for your business and what needs to change. By pulling reports that show your sales by category — including the ways your customers are paying, what time of day they’re paying and which employees are helping them sell the most — you get the best summary of your customers’ purchasing habits and can optimise your business processes accordingly to maximise profitability.