Are you leaving money on the table? Has someone just waltzed off into the sunset with your hard-earned dollars? One of the most significant issues we see in business is the lack of client follow-up. By not following up with your clients on their outstanding invoices, you could be throwing money away. Let’s have a look at how you can keep that money in your business.
The ins and outs of client follow-up
If you don’t have dollars in the bank, then your business is never going to be a success. There is only so long that you can survive on no money! So, you need to make sure that you keep the money flowing in. Here are our top tips for managing your cash flow.
1: Send your invoices out
Sending your invoices out might seem like an obvious instruction, but many businesses don’t send them out on a regular enough basis. Don’t wait to invoice your clients. Have a system in place where you send your invoices out as quickly as possible. Send them as a job is completed, or on a daily basis. If you provide a service, then you may consider charging an upfront deposit or setting up instalment payments for the term of the project.
2: Stay on top of outstanding invoices
Don’t be too lenient with your clients. If an invoice is outstanding past its due date, then take polite and fair action to remedy the debt. The longer an invoice remains outstanding, the harder it is to collect. Keep a close eye on your Accounts Receivables and step up your recovery efforts if you need to. Also, don’t be afraid to take formal action if the situation calls for it (we have some great contacts in this field so just yell out).
3: Get some help
The biggest advice we can give you is to get help with tedious admin tasks like debt collection. Before engaging our services, many of our clients would take months to send their invoices out, then another few months to realise they hadn’t been paid, then more time before they conducted client follow-up.
When you add all of the months up, that is almost a year that these businesses were waiting to get their money in the door! Depending on your payment terms, we can normally get it to you in one month. Nearly all of our VAs are Xero certified and going through your debtors is one of the first things we do to bring money into your business.
Picture this, in just one hour we could have followed up all of your debtors and thousands of dollars could be winging its way to your bank account. The only cost to you is one hour of our time. Even better than that, we have a foolproof process that means you never have to worry about being the ‘bad person’. There is no potential damage to the relationship with your client because we act as the middle person between your client and your ‘accounts team’.
4: Treat your time as a currency
Many business owners have a very DIY attitude. They are reluctant to pay someone if they can do it themselves. But you don’t have endless hours to work on your business. Sooner or later you are going to need to sleep.
Your time is a currency that is just as important as dollars. By using your time on busy work, you are wasting money. Imagine how much more revenue you could be generating with that time if you were focused on your core business.
5: Keep business and personal separate
It is difficult to get a clear picture of your finances if your personal transactions are mixed in with your business ones. If you keep them separate, then you will know exactly what you have to work within your business. You will understand what revenue you are generating and the costs you are incurring too. Once you know your numbers, you are in a position to pay yourself properly and invest funds back into your business.
Good cash flow is fundamental to your business success. And the heart of good cash flow starts with regular client follow-up. If you are sick of waiting for funds that never seem to appear then let us recover the money for you. Get in touch with Terri and the team here at Virtual Assistants, and we will be on top of your debtors in no time at all!