Cashflow Problems How To Get Your Money

Cashflow Problems How To Get Your Money



Cashflow Problems: How To Get Your Money
One of​ the​ most common problems that affects businesses is​ that their customers owe them money .​
When you've done the​ work but people are being slow to​ pay you,​ you can get behind with bills and be short of​ money to​ invest in​ your business .​
This is,​ understandably,​ an​ annoying situation -- you're being chased for debts that other people refuse to​ pay .​
There are,​ though,​ a​ few ways to​ improve your customers' payment speed.
Remember You're a​ Credit Provider.
When you do work and invoice afterwards you are extending credit to​ your customers .​
As such,​ if​ the​ cost is​ going to​ be high,​ you should consider running a​ credit check on​ them before you start work .​
This will show you whether the​ company you're about to​ do work for is​ in​ trouble,​ and can help avoid lots of​ problems later on​ .​
You can usually run credit checks onlin for next to​ nothing.
Give Invoices a​ Due Date.
A mistake many home businesses make is​ to​ send invoices that have a​ fancy layout and say how much the​ customer owes,​ but don't contain any direct instruction to​ pay now .​
This results in​ customers receiving the​ invoice and putting it​ on​ their 'unimportant chores' pile -- you know,​ the​ one that doesn't get done for months.
To avoid this,​ a​ good strategy is​ to​ give your invoices a​ due date .​
Set it​ two or​ three weeks from when you sent the​ invoice,​ and make sure you highlight it .​
People will see your deadline and realise that you mean business -- they'll think 'oh,​ I'd better deal with this' and you'll get your payment sooner rather than later .​
If you don't,​ a​ follow-up phone call saying 'I wonder if​ you realised that your invoice's due date was yesterday...' will usually do the​ trick .​
Almost no-one refuses to​ pay if​ you confront them directly -- they just do it​ because they think they can get away with it.
In some places,​ the​ practice of​ putting due dates on​ your invoices might even entitle you to​ charge interest on​ money you are owed,​ or​ charge fees .​
Check your local laws.
You Could Try Debt Factoring.
Some businesses have success with a​ technique called 'debt factoring' .​
This is​ when you sell your invoices to​ a​ third party who specialise in​ administration and collection,​ and they give you the​ money for the​ invoice straightaway instead of​ you having to​ wait for the​ customer .​
If you try this approach,​ though,​ you should consider the​ percentage of​ your invoices that the​ company is​ taking,​ and whether they're treating your customers the​ way you would want them to​ be treated .​
It might be best to​ only sell invoices to​ debt factoring companies when they haven't been paid by the​ due date,​ letting them act more like a​ collections agency.
Collections Agencies.
Of course,​ your last resort is​ to​ sell the​ debt to​ a​ collections agency .​
This will cost you around 10% of​ the​ debt .​
The collections agency will try to​ intimidate your customer into paying,​ ultimately taking them to​ court if​ necessary,​ and they might try seizing the​ customer's assets .​
Make sure you check out the​ agency you plan to​ use beforehand,​ though -- you don't want them to​ be doing anything illegal.
You should always try to​ talk to​ the​ customer before you take this route,​ as​ if​ they're not paying the​ chances are that there's a​ reason .​
You might be about to​ force them out of​ business .​
On the​ other hand,​ they might just be forgetful,​ in​ which case they won't be too happy about you setting debt collectors on​ them.
Be Prepared to​ Settle.
Sooner or​ later,​ you might end up being owed money by a​ business that is​ in​ financial trouble -- you're just one in​ a​ long list of​ creditors,​ as​ everything falls down around them .​
In this situation,​ you need to​ be prepared to​ settle with them for less than the​ original invoice price,​ or​ you risk getting nothing .​
It is​ a​ bad situation to​ be in,​ but it's better to​ give someone a​ break and get some money instead of​ pushing them further towards bankruptcy and getting nothing.




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