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Top 3 tips for SMBs to be paid on time
Ask any small business owner and they'll tell you: receiving paid invoices on time is one of their biggest concerns and pet peeves. But according to new data out from Xero, that is changing - because more SMBs are being paid faster than ever.
New data out from Xero indicates a change in the economic weather for many small businesses. According to their analysis of more than 16 million small business invoices, SMBs are being paid about 17 days sooner than they were in 2011. That is an increase in payment time of 37%, and is probably helping many SMB owners sleep easier at night.
Is your business being paid early? Xero's experts off their top 3 tips to improve payment time:
First, talk terms before starting a project. This seems simple enough but according to Xero making it clear when invoices should be paid - before starting a job - is crucial to actually being paid on time. And, by the way, Xero's data shows that if SMBs want invoices to be paid within 30 days the payment terms should be set to 13 days or less because most debtors pay invoices two weeks after they are received.
Second, don't wait to invoice. So you have sixty days to complete a job but finish in 35. Don't wait the additional 25 days to send that invoice. When the job is complete, invoice the contracting business.
"Send your invoice as soon as possible, the sooner a client receives an invoice the sooner they will make payment. It also means they will receive it when the value of your work is still fresh in their mind," writes Xero.
Finally, simplify the invoice. Detail the job, but make sure those details make sense to the client.
"List the details of the job in a way that makes sense to the client and receive validation that they read clear; any confusion could create a payment lag. It's also good to personalize your invoice with your business logo - it helps carry on the professionalism of your work. Ensure your bank details are on the invoice so you can be paid," writes Xero.
Image via Shutterstock
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