Claim money back for your business
Is your business missing out on incoming revenue? Late payment is one of the main problems for all small businesses and often you complete a job and don't see the money. You’ll be pleased to know that you’re not the only one and here at Tradeshift, we recently polled UK SMEs and asked them about the impact invoicing has on their business. It found that 39% of small business invoices failed to be paid on time.
If this sounds like a familiar problem, check out these top tips for claiming back money for your company.
1. Build relationships and keep communication channels open
Our survey found that small businesses issue 528 invoices on average each year and yet 69 remain unpaid. This is not good news at a time when life is tough for many SMEs.
It is amazing how far a little goodwill and and politeness will go. So establishing good relationships from day one and staying in regular communication means that a more collaborative approach to invoicing is possible, making things better for both parties.
2. Tackle cash flow before it becomes a problem
Under a third (30%) said cash flow issues caused by unpaid invoices could force them to lay off staff and 20% said they would have to turn down business or take out a business loan.
When asked about the reasons for non-payment of invoices, 34% put slow payers at the top of the list, followed by companies going out of business (24%), disputes over work (19%), cash flow (11%) and administration (9%).
Supply chain finance options or dynamic discounting could be a starting point to sorting out cashflow. Or why not change your payment window from 30 days to seven in the first instance?
3. Say no to paper and PDFs
The majority (76%) of all administrative time spent hunting down those who still owe money could be cut with e-invoicing. The 25 employee hours per week spent chasing unpaid bills is magnified by the fact that more than a third of invoices are still received by post.
Manually inputting all this information can take up considerable time. With online invoicing, processes are automated. It saves on paper too.
4. Embrace e-invoicing
Flexible online invoicing services often allow you to add different features and improve administrative processes.
Traditionally e-invoicing platforms have charged you a fee for every single invoice you send. At Tradeshift we think this is a backward approach and won’t encourage anyone to move to this new way of working. That’s why we are committed to free e-invoicing for everyone, forever.
5. Integrate financial processes
Financial processes are massively important but they are also very time consuming. The more you can automate processes such as quotes, purchases orders and invoice approvals, the more effective your internal systems will be.
I believe in 2012 there’s no reason why invoicing shouldn’t undergo a revolution that fits the modern times in which we live rather than acting as a noose waiting to drop around the necks of the UK’s army of small businesses. Who’s with me?
Mikkel Hippe Brun is co-founder and chief strategy officer at Tradeshift, the business to business network