How to avoid Christmas cash flow woes
Optimum Recoveries is thrilled to have been appointed an RCSA Preferred Partner. We absolutely love working in this space! Recruiters are such a passionate and energetic group of people who provide a crucial service to their clients.
We’re firm believers that the heart of any business is its people, so we understand just how valuable your contribution is to your clients. We also understand how much work goes into the recruitment process, and how costly it can be to a business if the wrong people are appointed.
Perhaps that’s why Optimum feels so passionately about you, as a recruitment business, getting paid - in full and on time - for the service you provide. The value that you bring to your clients is far too important to be left waiting for payment.
We totally support RCSA’s #LoveYourWork campaign, but we’d like to make one change.
We think #LoveYourWorkAndGetPaidForIt is a much better way to go!
In this article, we outline some key things to do before you finish up for 2019.
With the end of the year almost here, I’m sure you’re already in countdown mode and looking forward to the Christmas break. It’s always a much-needed opportunity to rest and recharge before hitting the ground running again in January.
But it’s important to remember that the start of a new year can be a hard financial time for businesses. BAS payments are due and there’s often a downturn in work in the holiday period. When you add late or unpaid invoices into the equation, things can get really tough.
So, let’s take action now and get your cash in the door so that your business isn’t dealing with Christmas Cash Flow Woes.
Tip 1: Invoice now and follow up straight away
Don’t wait until you’re closing off the month to invoice. January is a notoriously hard month to get paid, so as soon as you can, send the invoice and then call your client to follow up. Sounds too pushy? Well, it’s not really.
Think of it as a ‘proactive relationship management call’, rather than a ‘chasing payment’ call. A friendly preemptive phone call to check that they received your invoice and that it has been entered for payment by the due date is actually a more positive phone call than one made to chase an overdue account.
Tip 2: Know your terms and conditions
OK, be honest. Have you taken the time to review and understand your business’s terms and conditions? We get it – you’re focused on thrill of the chase, making that sale, providing the most professional service possible to your clients, and finding the perfect candidate for the position. The nitty gritty detail on the invoice is not so much fun. But it is SO important!
If you don’t understand your business’s terms and conditions, you can’t really blame your clients for sometimes pushing the boundaries. Have the conversation with them about what they can expect from you, but also what your business can expect from them.
Tip 3: Have a set follow-up policy
If you’re operating an accounting software like Xero or MYOB, it’s easy to set automatic reminders for every invoice. Consider setting a reminder to be emailed two days before an invoice is due, another for a day or two after the due date, and another at seven days after the due date. If no action is forthcoming after this reminder, then it might be time for a phone call. Remember that the longer you leave the invoice remain unpaid without following up, the longer payment will drag out.
As you probably know, RCSA’s recent partnership with Scottish Pacific Business Finance is providing a great invoicing option for recruitment businesses. But, if you’re thinking of applying, you’ll have a much better chance of being approved if you have solid follow-up procedures already in place.
Tip 4: Make it easy to get paid
Cast your eye over one of your invoices. Is it clearly set out and easy to read, or is it visually confusing? Are all the details correct? Are you offering your clients multiple ways to pay? The more options you provide, such as direct credit, credit card, BPAY, PayPal etc, the easier it will be for your clients to choose a payment method that suits them.
We hope the tips we’ve shared here help you have a merrier and cash flow positive Christmas!
I’ll be running a free webinar for RCSA members on January 28, 2020, where I’ll share even more tips about avoiding cash flow hiccups, and some advice on how to make that dreaded call to chase a payment. I’ll also be presenting some interesting statistics about our topsy turvy economy and how this could affect your business.
To register your interest in the webinar email me directly at email@example.com. In the meantime, if there’s a question you’d like to ask about any aspect of cash flow or the credit cycle, shoot me an email and I’d be more than happy to cover it in the webinar or an e-newsletter.