Got outstanding invoices? Here are 8 things you can do

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Article provided by Xero

It would be nice if you could send an invoice, then sit back and watch the money roll in. But half of all invoices are paid late. And some aren’t paid at all. So how do you handle outstanding invoices?

How to collect money

Some people – like credit control managers, accountants and debt collectors – make a living out of getting invoices paid. Their methods aren’t rocket science. Just a mix of persistence and courage. If you’ve got outstanding invoices, try their techniques. Here are their tips on how to collect money (and many experts recommend starting at number four, by the way).

Write a payment request letter or email

This is your first move when someone is late paying an invoice, so there’s no need to overthink it. Open your note with a polite greeting, quote the invoice number, say when it was due, and ask when you can expect payment. There’s no need to explain what the invoice was for. The details should be on the invoice itself. Keep the letter or email really short.

Send a past due invoice

You could send a past due invoice, which is really just the original invoice with a ‘past due’ stamp on it. Or you could simply re-attach the original invoice to your payment request email, with or without the past due stamp.

Send a statement of accounts

A statement of accounts shows all the outstanding invoices a particular customer has with you. If someone has a few, by all means summarise them into one document or use your accounts software to generate a statement. But don’t expect it to hurry them up unless you follow with a phone call.

Make the dreaded phone call

Businesses that chase late payers by phone tend to get the best results. Customers can always screen your call but, once you have them on the line, it’s hard for them to ignore you. Don’t say too much. They’re the ones who need to do the talking. Just identify what’s overdue, ask when it will be paid, then wait in silence. Don’t get off the phone till they’ve told you when payment will arrive.

Charge a late payment fee on your invoices

You can demand more money if payment is late, but you can’t do it out of the blue. You need a late-fee policy and it must be clearly communicated up front in your payment terms. This is a great reason to get an agreement signed before supplying anything.

Identify late fees on the invoice, too. Don’t make it complicated. Some businesses quote it as a percentage but you’re better off to do the maths for your customer. Say something like:

Total due by 1 June: R100

Total due after 1 June: R110

Write (or call) to tell a customer when they’ve entered late fee territory. You could even offer to waive the fee if the customer pays right away.

Cut them off until outstanding invoices are paid

Why would you keep providing goods or services that you’re not getting paid for? It’s unsustainable. If a customer stops paying, stop filling their orders. And tell them what bills need to be paid before you’ll start supplying them again.

This is an aggressive move and some customers will take offence. You need to be prepared to lose the business to do this.

Hire a debt collector to go after your overdue invoice

Debt collectors have a skill for getting overdue invoices paid. It should cost nothing to put them on a case, but they’ll take 25% or more of the money they collect. This is likely to bring an end to your relationship with the customer so make sure you’ve exhausted all your other options.

Call in the lawyers

If the debt collectors don’t make any progress, then you could go all the way and hire a lawyer. The specific legal action will depend on the type of organisation you’re dealing with. It’s different for sole traders, partnerships and companies. In other words, it can get complex – so use a specialist lawyer. Your debt collector might have in-house legal expertise, or they may introduce you to a lawyer.

If your outstanding invoice stays unpaid

You have a lot of levers for getting paid, but sometimes none of them work. You may get stuck with an unpaid invoice. If that happens, you should write it off so your accounts reflect the lost income. That’s especially important if you’ve already paid tax on the income that was expected. The act of writing it off allows you to claim the tax back.

To reduce your chance of getting caught with an unpaid invoice in the future, consider doing credit checks on prospective customers before agreeing to work with them.

Xero is a proud Partner of the NSBC.

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Marketing Strategies for Tough Times

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South Africa entered a recession in the second quarter of 2018, for the first time since 2009.

Should you cancel your marketing plans, batten down the hatches and ride it out? Or should you beef up your promotional efforts and try to generate as much business as possible? These are questions companies have been asking now and for decades.

Maintaining corporate and product brand recognition should be considered an ongoing business investment. The moment it stops, it begins to lose power immediately, and future sales are in jeopardy. Studies have shown it takes four to six months to see the results of an advertising program. Cutting back during a downturn is like throwing away that investment. Maintenance today costs much less than rebuilding tomorrow.

Advertising should be seen as an investment rather than an expense. It is an investment  not only for short-term sales gains, but also for achieving longer term goals and developing brand equity. Strong and consistent advertising reinforces favorable attitudes toward your company and its products.

Data shows there is a direct effect of increasing or decreasing advertising during recessionary periods. The three basic premises are:

  • Advertising creates power. Companies that invest more in advertising over a period of years experience faster growth than those that spend less.
  • Advertising serves to revitalize. Companies that have increased their advertising budget during a recession have recovered more rapidly than their counterparts that have maintained or reduced advertising.
  • Advertising increases the bottom line. Organizations that have continuously increased their advertising investment have enjoyed similar increases in sales.

Here are some strategies that can help a company thrive in a recession economy.

  • Develop a strategic marketing plan. Don’t waste money advertising the wrong message in the wrong place and to the wrong audience.
  • Increase the advertising budget.  If your competitors cut back, your message has the chance to grow stronger.
  • Stay in contact with loyal customers. Keep in touch and let them know what you have to offer.
  • Product introductions. Introduce well-conceived and properly marketed new products when the competition is weak.
  • Sustain awareness. Advertising works cumulatively – remind people frequently about your brand or they’ll forget you.

A recession can help you strengthen the position of your company in your marketplace. Continuing advertising and marketing during a recession may not only be a smart thing to do, it may be a business opportunity you can’t afford to miss.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Your big tech guide – the basics you need to launch your business

In this guide, we’ll introduce you to technologies and tools you might need when you’re starting your own business.

Cyber security

Cyber security is not negotiable. Entrepreneurs need to ensure that they are protected from cyber-attacks, which can be detrimental to business continuity. Cyber security can prevent the loss of customer data and data backups.

Accounting cloud-based technology

These cloud-based platforms can help to increase productivity and provide entrepreneurs with real-time information via smartphone apps and the internet. Examples of these are SageXero and GreatSoft Cloud.

Project management tools

Entrepreneurs can create and edit documents online for free by using Google Docs. Tools like Asana and Trello are used for project management, productivity and project tracking. Slack is a team collaboration tool and service that allows you to communicate with staff and share projects.

Digital marketing

Mike Anderson, founder and CEO of the National Small Business Chamber, says all SMEs, no matter how small must professionalise their business.

“A few key things to action would be: a dedicated domain http://www.abctrading.co.za, a dedicated email david@abctrading.co.za, a website, a Facebook/ Instagram page and a Linkedin presence. This enhanced image and presence will allow the SME to be able to secure many more customers and grow top line quicker as seasoned businesses. Companies want to do business with those who take their business seriously and who are perceived to be stable and successful.”

Domain and website hosting

According to Hosting Web, domains can be bought and hosted from companies like AfrihostHetznerAxxess and Domains.co.za.  Website hosting is a type of internet hosting service that allows an individual or company to be visible on the internet.

Fibre and mobile data

The difference between fibre and mobile data is that fibre runs on a physical fibre optic backbone that connects an internet user with the internet. A mobile data connection runs on 3G or LTE and does not require physical cables.

ADSL and fibre are broadband connectivity solutions that use different infrastructure. The two also differ in the amount of speed they can reach. Beware: ADSL and even fibre can suffer from outages; having a mobile connection to fall back on is vital.

Social media

Social media management tools like Hootsuite and Buffer for example let you post and schedule social media posts on Facebook, Twitter and Linkedin.

Mobile payment solutions

iKhokhaYocoWAPPointSureSwipe and ZipZap are examples of mobile payment options that entrepreneurs can possibly use. You can also make use of SnapScan.

Melissa Javan – freelance journalist and content contributor of the NSBC

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Make every Rietmark lead count

closing-dealsAs part of our commitment to helping local businesses, herewith a few tips to help your business close more deals!

Make a great first impression:
Give your business the best chances from the start with your first contact. Be friendly and accommodating over telephone contact. Ensure that the customer is free to speak or arrange a set time to phone back.

Follow up on your leads:
If you are unable to reach a customer by phone; don’t give up! Try again or send the customer an email stating you would like to quote them and arrange a time to phone back.

Improve your Rietmark advert:
Make use of our FREE design service for monthly, seasonal or periodical changes to your ad. Tell readers what is unique to your business or service. Keep contact details up-to-date.

Close leads by marketing your business:
Your business is your livelihood. So close the deal by making your business the best choice! Make sure you help customers understand why your business is the best for the job.

We hope these tips help your business to be even more successful. We look forward to  your business continuing to grow with Rietmark.

For any further assistance please contact us.

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Basic tips to drive further with your car’s fuel

13-555x370The continued increase in the petrol price means that expenditure on fuel is becoming an ever bigger monthly expense for every business and household. A few changes to your lifestyle and driving habits can make your fuel go further.

Drive slower

The easiest way to cut your fuel bill – and which will have the most pronounced effect on your wallet – is to change your driving style. Drive slower, do not speed up fast and rather coast to a stop than driving fast and braking hard. Rather leave earlier, relax and listen to some music. See your daily commute as a rare moment of quiet personal time.

Drive less

A little bit of planning can cut out unnecessary kilometres. Just spend a minute to think of what you need to do and cut out driving all around town. Find a parking between your destinations and walk a few hundred metres. Think if you really need to go shopping today, or can it wait until tomorrow when you need to do something else as well.

Lift club

A lift club is not for everybody, but can save a lot of money. Driving with somebody in the office or the building next door cuts the fuel cost in half. Or organise a lift for the kids.

Avoid traffic

Crawling along in first gear at 20km/h in heavy traffic uses a lot of fuel. Beat the traffic by leaving earlier or wait 10 minutes for traffic around the school to clear before driving off.

Check your tyres

Tyres are of the most important components of a car, and probably the most neglected.  Checking tyre pressure costs nothing and takes only a few minutes. Correct tyre pressure reduces fuel consumption, as well as wear and tear. It also makes your car much safer.

Switch off the air conditioner

Most cars have air conditioners and we all use them constantly, despite SA’s mostly mild weather. Air conditioner units use a lot of an engine’s energy and increases fuel consumption by up to 15%. Switch if off on mild days and use only the air circulation fan.

Loyalty programmes

Most banks and some retailers have linked up with fuel companies to offer some kind of loyalty scheme. Sign up for a suitable loyalty programme that gives you cash back, discount on vitamins or points to buy a new TV.

Service your car

Cars with dirty air filters, old oil and fouled spark plugs perform sluggishly and use more fuel. A quick service will make the engine more efficient and the savings in fuel will pay for the service within a few months.

And lastly, look at the fuel consumption if you are considering a new car.

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Simple tips to getting paid faster

shutterstock_134352887_supersize.jpgGetting customers to pay on time is one of the biggest challenges for business owners and when the problem persists too long, it can ultimately shut down a small business.

For any business, the amount of money flowing in or out is critical to its success. When money is tight, paying basic bills can get challenging. But when cash is plentiful, a business can invest in its future by expanding, buying new equipment, hiring key staff or retaining key staff by rewarding them further.

Late payments are at an all-time high as SMEs wait too long to get paid. The average amount owed to each SME is now at its highest level. The result is that SMEs are going out of business due to late payments. This is totally unacceptable, as in most cases when a small business goes out of business a family goes out of business.

Here are a few simple tips to getting paid faster and to keeping the cash flowing in:

Invoice your client immediately

The quicker you execute, the quicker you will be paid. Also, if you delay the invoice, it indicates that you not in too much of a hurry to get paid. Business owners are often slow at getting their invoices out once they have completed their work for a customer. Remember that your client has no obligation to pay until they receive an invoice, so don’t wait.

Make payment terms crystal clear

You need to communicate the deadline on your quotes and invoices clearly as well as in all your telephone and e-mail follow-ups.

Incentivise for early payments

Sweeten the pot and speed up payments by offering customers a small discount for paying early. Make sure the financial trade-off is worth it before you extend this offer. You don’t want to offer a discount that you can’t afford.

Invoice smaller amounts than that big invoice

It is a known fact that it is a “human thing” to dislike paying over money. So, what we need to do is make it easier by splitting invoices, rather issue a few small invoices than that big one. This sometimes poses a problem, however if you can do it, it certainly works.

Make a personal connection with the “Money Team”

The key success factor in growing the top line is to build solid relationships with the decision makers. What we forget to do is build relationships with those in the business that pay the accounts. Get personal with the “Money Team” and get them to pay you first.

Itemise every detail

You need to itemise every item on the invoice and clearly state the unit cost of every item. Going backwards and forwards in correcting invoices is a big contributor to delayed payments.

Check that every invoice is accurate

To elaborate further, ensure that all the correct details are on the invoice before sending the invoice out. Few customers will rush to query an invoice that doesn’t look right – they just won’t pay it.

Especially when you’re dealing with larger corporate or government clients, invoices can easily get lost in a maze of bureaucracy. Never send an invoice out blind. Always make sure you know the specific department, individual, email and/or mailing address to send your invoice.

Follow-up – use the telephone to chase money

Many experts in the field agree that making phone calls can be up to 80% more effective than emails and letters. Prioritise your cash collection and chase the oldest and largest debts first. One of the most common reasons small business owners don’t get paid on time is that they never follow up on late payments. When payments are due, follow-up immediately, by which I mean “the next day.”  

Always check whether a purchase order is required

Many large organisations will not pay an invoice without a purchase order. They are also unlikely to call you and ask for one. Your invoice will simply sit on a desk, not be entered into the system, and not paid. This could mean the difference between prompt payment or none at all.

Professional invoices get priority

Professional looking invoices are more likely to get attention and get treated as a priority than something that looks like you printed it out on an old printer or typed on any piece of paper you could find.

Look for invoice templates that let you create custom invoices featuring your business logo. Use bold colours wisely to emphasise the key parts of the invoice, like the total amount and the due date. Keep it simple; a cluttered, overly detailed design will only confuse the recipient.

Make the payment process easy

Offer a range of payment options to your customers and put your payment methods on all proposals, invoices and statements. For example, you might accept credit cards, debit cards, cash and EFTs. Different methods will suit different customers, so offer as many options as possible.

Article by Mike Anderson (NSBC Founder & CEO)

 

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