Self-employment
Collecting your cashBusiness to business sellers can be slaves to the mail, waiting and watching and hoping for customers to pay their invoices. If your new small business issues invoices, follow these tips to speed up those wonderful incoming payments: ROGER PIERCE -- www.bizlaunch.ca |
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 [ 2007-11-21 ] |
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- Take credit cards. An increasing number of companies pay their bills by credit card. By setting up your own Merchant Account, you'll be able to take their money without invoicing. Merchant Accounts will typically charge you a few percentage points for each transaction, but you'll get your money much faster.
- Offer early payment discounts. It's standard practice to offer a small discount to your customers if they pay your invoice in less than 30 days. The term, "2/10 net 30" means you'll reduce the invoice amount by 2% if it is paid within 10 days. Your customer will appreciate the savings and you'll appreciate the prompt payment.
- Know when to expect payment. Customers -- especially large corporations -- may follow established payment terms for vendors like you. Talk to someone in Accounts Payable to understand their deal. Will they pay in 30 days or 60 days? Do they pay from the date of your invoice, from the receipt of your invoice, or only when work is completed?
- Plan for delays. There's nothing worse than waiting for a client cheque to arrive in the mail. If you invoice a client regularly, you'll get to know their payment behaviour and be able to anticipate that incoming cash. For new or occasional clients whose payment patterns are unknown, it's always best to count on getting your cash later than you hope.
Looking for startup inspiration? Find it at the free Bell BizLaunch Seminar, How to Create Your Million $ Idea, presented on Thurs. Nov. 22, from 6:30 to 8 p.m. in Metro Hall, 55 John St. (at King West), Room 302, Toronto.
Startup expert Roger Pierce advises startups at BizLaunch.ca.
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