What would it mean for your business if you could shorten your invoicing cycle by 70%?
First and foremost, it would mean more money in the bank, faster. For a lot of businesses though, the struggle of drawn out billing cycles, late payments, and having to chase clients for what’s owed starts to affect their efficiency and overall bottom line. As David Finkel (co-author of Scale: Seven Proven Principles to Grow Your Business and Get Your Life Back) writes, “the faster you collect from your customers, the easier it will be to manage your cash flow”. If you’ve ever felt like your client base is growing and your team is taking on as much work as they can, yet cash flow still seems tight, you may be suffering from a dragged out billing cycle. So - here’s what you need to know and how you can fix it:
Are you jumping between one tool to manage your customer contacts, another to manage your client work or projects, and something entirely different to deal with billing and invoicing? If the different platforms you’re using for each part of your business don’t talk to each other, it can really hurt your efficiency (i.e. your ability to quickly convert a project to a quote and bill a client for it in one shot). The longer it takes you to bill them, the more time you add to your invoicing cycle, and the tighter your cash flow will be. That being said, it's worth doing some research into the platforms that can connect all the moving parts of your business, like billing.
Part of growing your business means streamlining your processes so that you can operate more efficiently. With that in mind, why would you spend yours or your employees' valuable time dealing with invoicing when there are platforms out there that can automate all of this for you? To be clear, having a person on your team work on this instead of implementing smart technology to do it for you could be costing your business over $50,000 per employee, per year. Also, when things run automatically, there's no room for human error or “busywork” to catch up with you. Brendon O’Sullivan, the CEO of Big Blue Digital, describes such an experience before automating all of his workflows and processes with smart technology: “Historically, we got down to as bad as 60-plus days in a billing cycle… Our invoices would be sent too late and paid too late - everything we were doing was too late!” If you’re operating a businesses that does a lot of recurring payments (think: accounting, website management, or hosting) automating those recurring invoices is a no-brainer.
That’s right - the less hoops customers have to jump through to pay you, the more likely you’ll get that money in the bank sooner. If you’re still sending your clients invoices in the mail long after services have been rendered, you’re not only prolonging the billing cycle, you’re making them have to go through the trouble of writing a physical check and mailing it. In 2016, there’s no excuse for not utilizing an online payment tool (unless your clients are very senior citizens) that’ll make the payment process seamless for your customers and extra quick for you. Here are a few of our favorites:
PayPal: love this option because it’s a worldwide brand so you’re guaranteed to have your customers' confidence. Added bonus: you can accept credit cards or let customers pay you directly through their PayPal account for even faster turnaround. Find out more here.
Part of running a more successful business and getting back to doing the work you love means streamlining your processes so that you can eliminate (i.e. automate) all your busy admin work like billing and invest that saved time into growing your company. If you’re curious about how a business like yours went from a 60-day invoicing cycle down to an 18-day invoicing cycle, you should check this out.