Glen Foster, Head of Partner Channel at Xero on invoicing

For small business owners, getting paid on time is crucial for success. But, invariably, not everyone can or will pay up when they should, so how can you encourage faster payments and improve cash flow in your small business?

• Discuss payment terms from the get go

Getting the payment terms sorted upfront means there won’t be any confusion further down the track. It also sets the client’s expectations around payment before you start the work.

• Maintain detailed records of inventory and time

This will save time when it comes to creating the invoice and will make sure none of the details are missed. It also means you can instantly let your client know if your work is going beyond the budget.

• Make invoices clear and easily understood

List the details of the job in a way that makes sense to the client, as any sort of confusion can lead to a lag in payment. Personalise your invoice with your business logo and your bank details to speed up the payment process.

• Use online invoicing and implement payment services

Xero offers an online invoicing feature that encourages collaboration with your clients. Changes made to invoices are instantly updated, providing you with information about whether the invoice has been received, and also whether it’s been viewed. This, coupled with a payment service, can help get that payment in up to two weeks quicker.

• Keep track of late payments

When your payments become overdue, send reminders, monthly statements or make phone calls. Having a process that helps streamline invoicing can reduce the amount of time you spend chasing your payments.