In a perfect world, every business-to-business transaction would be invoiced and paid on time, but many SMB owners simply view payment terms as a window of time that allows them the freedom to prioritise other tasks, instead of using it as a platform to regulate effective cash flow.
As a general rule, when you make it easier for your customers to pay, they’ll pay sooner. It’s something we’ve seen radicalise e-commerce on a consumer level, with companies like Amazon in particular benefiting from the introduction of one-click payments. Incredibly tempting for consumers, incredibly rewarding for businesses, effectively breaking down the barrier between you and your bank account.
Some accounting software offers a ‘pay now’ button on online invoices, which means you can send customers invoices online with the option of getting paid instantly. As more businesses move their accounting processes to the cloud, more employees are able to check, sign, approve and facilitate payments from different locations, giving freedom to the CEO, but also the finance director.
One contributing factor to late payments, and often the reason credit controllers with good intentions can get caught out by senior team members, is the authorisation process. It’s often said that the notion of ‘chasing payments’ is two-fold: one side accounts, the other side approvals. This is where technology strikes again, and the fact that someone is ‘out of the office’ needn’t prevent them from signing a document. Apps like DocuSign that facilitate secure, digital signatures mean there are no excuses for not processing a payment because the FD wasn’t in the building to approve it.
Technology is changing the way companies work together, and streamlining the bureaucratic processes that slow down invoice payments. It’s worth considering what technology can do to speed up cash flow, and taking an active step to reduce the likelihood of late payment, rather than simply lamenting it.
Let’s beat late invoice payments together. Visit: chasingpayments.com