Running a business is very exciting. I know it myself.
Many times we focus on more interesting aspects of running it, such as sales, marketing, networking or service improvement. Most business owners neglect their finances, leaving it to their accountant.
Often, when invoices are not paid as agreed, you might wait some time before addressing the issue with your clients.
Truth is, most clients want to pay you but at the day of payment they had better things to do and paying you was not a priority for them. Another truth is, that the longer you wait to address the issue the lower your chances to collect the payment (ever).
As you can see in a graph below, there is a huge drop in chances to collect payment due. If an invoice is outstanding on a due date has 94% chance to get paid, then invoice that was not settled for a month drops to 89%.
Meaning, there is a 5% difference because it was not dealt appropriately. If your annual turnover is somewhere around $3M, like an average small business this means that you might be leaving $150K on the table, each year. Because you are not addressing your receivables like you should. Even for a much smaller operation, that has $100K annual turnover, it means that you are missing out on $5K annually.
There is no reason to do so when the process can be automated for a fraction of the potential cost. Not even mentioning that you will be saving a lot of time and effort along the way.
Offering your customers a solution for quick invoice settlement, reminding them that invoices are still open will drive your cash flow and the bottom line up. In the meantime, you will be able to devote yourself to more interesting tasks – like sales or service improvement.