Today I’m going to teach you how to beg for your money.
Well, not really. But it feels like that sometimes, right? Like asking customers to pay you what you’re owed is just a step above standing on a street corner with a cardboard sign? Or like following up on an invoice is like knocking on your customer’s door and rattling a tin can?
So let's spend a few minutes talking about why it’s so hard to ask for money.
One reason is that you’re used to dealing with your clients as an authority. They’ve come to you for a product or service and you’ve provided it. You’ve shared your expertise. You’ve helped them. But now, when it comes time for invoicing, and getting paid, the roles have reversed.
Now you are coming to them, and you’re forced to step a bit outside of this comfortable, authoritative role you’ve been in and that can be awkward.
Timing Is Everything
Another reason it’s hard to ask for money is that most people do it at the wrong time.
Say for example you finish a project, then a week or two later you send out the invoice, then somewhere around 30 days later (if the invoice has not been paid) you start to wonder what’s going on… But you are busy with new work, so you wait another week (or two) before finally following up – it’s been 50-60 days since the project was finished, and you are just now making your first phone call about the bill. Not ideal.
Who's On Point?
So, what should you do? First, decide who is best to handle the task: you and your internal team, or a specialist outside the company (and yes, shameless plug, that what we do here at InvoiceCare).
If you decide to handle A/R in-house, make sure you have someone in charge who is REALLY focused on the details of the follow up schedule. Make sure there is one person who "has the ball” internally, is focused on your A/R health, and is tracking basic A/R measurements and monitoring your at-risk accounts.
If you decide to outsource this function to someone like InvoiceCare, make sure you have clear goals—know where your starting point is and where you want to be before jumping into that relationship.
Consistency Is Key
Have a pre-defined schedule for all your A/R-related follow up. Set up a schedule that you can stick to (i.e., don’t over commit) but that also is accomplishing your cash flow objectives. Generally speaking you want to start early, like before the invoice is due, and you want boringly-consistent follow up until each invoice is paid.
Finally, remember that your client relationships demand excellence from beginning to end—start strong, deliver the goods, then finish by showing your client you care about the details, including your follow-up processes. Doing A/R well is in many ways the best way to finish strong. Besides of course, sending cookies.
Now, go get your money.