How our simple tool makes managing your Business Finances simple.
According to a recent Irish Independent article, Irish Businesses are coming Paddy Last when it comes to getting paid for their goods and services. Things have improved slightly (by a couple of days) since the introduction of the European Late Payment Directive in March this year.
Are you a Business that’s just started trading, or have been trading for a while with no way of tracking how long it takes to get paid? You could be in serious do-do sooner than you think. Bullet was designed to take the fear out of managing your Business Finances by yourself.
- Who owes you money? Have you lost track?
- How long do they owe it to you?
- Will you have the minimum in the bank to cover your outgoings this month?
- Can you cover unexpected shortfalls or expenses?
- Are you being too lenient on your Customers?
- How do I get paid sooner without antagonising my customer?
- What are the long term affects?
First, get a tool that lets you do invoices on the fly and get that invoice out to your Customer ASAP
Next use a Financial Report that segments your Debtors for you and presents the information like an infographic – as opposed to a boring spreadsheet.
Tackle debtors in order of number of days overdue. Those who have kept you waiting more than 6o days are the least likely to pay. It’s time to get firm. You have 2 options here.
1: Offer to set up an Installment Payment Plan. First ask for a substantial payment to reduce the balance owed to you by as much as possible. Divide the balance after this payment by the number of months/installments you have agreed to. Ask, for a standing order to be set up to cover the installments and for confirmation once it’s in place.
2: You have the option to use a reputable Debt Collection agency such as Stubbs Gazette to assist you with collecting payment.
Financial Health check for your Business – Part 1
The first part to Bullet’s Health Check tool highlights the number of days you’ve been waiting to be paid on current invoices.
If you’ve been waiting to be paid 60 days or less you can engage with your Customer in a friendly way in the form of a phone call or written reminder. If necessary, point out that you are prepared to be flexible due to your understanding of their Financial Situation. All the while, stress how valuable they are to you and that you wish to maintain the current strong relationship you have with them. This form of gentle persuasion usually does the trick.
Financial Health check for your Business – Part 2
How quickly are you getting paid on average? This is a valuable indicator that enables you to put systems in place to prevent overdue payments falling into the 60+ days category. Make sure you’re invoicing at the right time. The best time to send an invoice is with the delivery. Any day later, is an extra day’s credit you’re giving away at your businesses expense.
The example below is a young and healthy company, with an average of 20 days to get paid. If you’re average is above 30 days, it’s time to take action to minimise risk by engaging with your Customer. A simple phone call prior to the payment due date, is usually enough. Follow up this phone call with an e-mail detailing your conversation and agreed payment terms. This means you have a record of the conversation and increases the likelihood of your customer sticking to what they say.
The third aspect to Bullet’s Health Check Tool is an Income and Expenditure Tool. If delays in getting paid or lack of control over your spending are putting your liquidity at risk, this is where you’ll see it at a glance.
If the money out bar is similar in size or larger than your money in bar you could be heading for some difficulty. Increase your efforts on getting paid following the advice above. Also, work on reducing your expenses in the short term, or negotiate extended payment terms for your bills until you catch up on cash collection. It might be time to consider the option of using short term finance such as an overdraft.
Financial Health Check for your Business – Part 3
Bullet keeps your business finances in check for you on a continuous basis so you can maximise your liquidity.