As a business owner, your company may be experiencing cash flow problems. The business model works, but you’re just running out of money. This is holding the company back because you can’t meet orders, pay your staff or expand your operations.
One reason for these cash flow problems is simply when you have outstanding accounts receivable. Other customers or business owners owe you a substantial amount of money, and they haven’t paid. You’ve already delivered the products or services, but not getting paid is creating financial constraints for your company that wouldn’t exist otherwise.
6 key tips
There are some steps you can take to get clients to pay on time, such as:
- Using biweekly payments instead of asking for total payments at once.
- Sending out invoices at a slightly earlier date to get the process started.
- Incentivizing people for paying their bills off early – or charging fees for late payments.
- Getting deposits at the beginning so that nonpayment of the remaining balance doesn’t have as much of a negative impact on your company.
- Reviewing your payment terms to make sure that the obligations are clear.
- Allowing those who owe to use multiple payment methods, as they may not be able to afford the balance with just one method.
It is certainly true that these tips can help, but that may not solve your problem. After all, these clients already have an obligation to pay and they are not upholding that obligation. If they continue to do so, it can cause serious harm to your business, so you must know what legal steps you can take.