Small Business: How to get paid on time
"You are seeing a new trend: People wait until they can get a bargain, they buy something for themselves that they might like, and they use their gift cards," said Pearl Kamer, chief economist for the Long Island Association business group. Credit: iStock
For many small businesses, getting paid on time in this economy is a major challenge -- and getting paid early seems almost impossible.
Payment cycles are being drawn out as customers are paying later, creating a cash crunch for many business owners.
Your business' ability to encourage prompter payment can help alleviate cash flow problems and reduce outstanding accounts receivable, say experts.
"A small-business owner should be proactive in offering incentives and initiatives to get their customers to pay them early," says Michelle Dunn, a Plymouth, N.H.-based collections expert and author of "The Guide To Getting Paid" (Wiley; $24.95). "If you give your customer an inch, they'll take a mile."
Here are some ways to encourage faster payment:
Invoice promptly: Don't wait until the end of the month, says Attard. "The faster your bills go out, the faster the money comes in," she notes.
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