Outstanding invoices are one of the biggest hurdles small business owners can face when managing cash flow or taking on new projects. The most common industry affected by slow-paying customers is in the manufacturing space because retail customers are getting the products and services in advance and will pay the manufacture later. Retail customers internally delay their payments for 30/60/90 days to control their own cash flow needs.
This can create a problem for most business owners because they must pay their monthly business expenses as well. These unpaid invoices are called outstanding invoices or account receivables. There are many ways through which you can prevent customers from delaying their invoices. Let us discuss four ways to get invoices paid quicker.
Never delay your invoices
The sooner you send your invoices the quicker you will receive payments from your clients. If you have a small business or working as a freelancer make it your habit. Try to complete work earlier than the due date and send invoices when you complete your last milestone. This way your work is fresh in their mind and if the client wants to make changes it is an easier process.
Always try to get cash in advance
It is important to agree to terms and conditions with your clients before taking on new opportunities or projects. This way your clients will have a project end date or agreed on stages that detail when payments are due. A contract or agreement will never lead to any confusion and your clients will know all the terms and conditions in advance. Agreeing on a down payment will support the project and help cover your cost. Try a third down, third on the next deliverable, and a third when the project is completed.
Try offering a diverse method of payments
As a small business, it is important to reach more clients through different payment methods as it will help your business grow. The flexibility of your payment methods will help clients pay you often and on time in return, this will help you get invoices paid quickly. Methods of payment can be cash, check, credit or debit cards, payment apps like Zelle, and old fashion bartering.
Factoring your outstanding invoices
Factoring your outstanding invoices is one of the best options for a business to get funding quickly. In this procedure, you sell your outstanding invoices to a lender that will charge a fee which varies from 1% for 30 days, 3% for 60 days to 5% for 90 days as an example.
This will give the lender a time span from 1 month to 3 months in which your customers should pay the invoice. Before you factor any invoice, you need to make sure the terms are clear, and you know what will happen if your customer refuses to pay the invoice.
BitX Funding is one of the best options if you are thinking about factoring your outstanding invoices. BitX Funding’s deep bench of lenders will provide you with funding up to 90% of the invoice in advance and 10% after clearing the invoices from your customers. BitX works with many lenders that can help you get cash against your outstanding invoices at a competitive rate.
BitX Funding is the online marketplace for small business owners looking to fund a project. We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and we are passionate about helping your company reach its full potential.
You can reach loans specialist by toll-free at 1-800-824-2407, or email at email@example.com or applying online here and we can guide you on which loans are the best fit for your business.