Late payments are a significant problem for many businesses, with the average small business owed £12,000 in outstanding invoices. Combine that with an average of 336 hours a year spent chasing late payments and it’s easy to see the impact on businesses.
But don’t despair, there are simple steps you can take to help you to get paid faster. Our guide to getting paid faster explains which payment methods are the fastest, how to handle the main excuses for late payments and how to embrace newer payment types in your business.
Moving from cheques and cash
Which payment types does your business accept? Although the Payments Council has confirmed that cheques are here to stay, there are many advantages to using newer technology, such as e-invoices. These allow customers to pay straight from the invoice in just a couple of clicks.
Switching to these types of payments offer a number of advantages:
Get paid faster and better cash flow
If you want your customers to pay on time, look at alternative payment methods. By switching from cheque and cash to card, you could:
- Get paid 50% faster if you take card or phone payments
- Get paid twice as quickly by adding Pay Now buttons to your invoice
- Offer customers more choice. 84% of small businesses we surveyed say that making payments easier for their customers helps them get paid faster
Get more sales
Customers increasingly expect that businesses will be able to take payments in a format that suits them. Using cards to pay for goods and services has doubled in the last 10 years but some businesses don’t have the capability to take these payments. Research by Barclays found that:
- One in six consumers wouldn’t make a purchase if they couldn’t pay by card
- These lost sales cost businesses £7 billion a year
So it pays to make sure your business can take payments this way.
Save money
If you’re worried about the costs of new types of payments, you shouldn’t be. In fact, switching over could save you money.
For example, the average business could save up to £4,500 per year by using the Sage Get Paid Faster Pack of payments solutions. These savings come from reduced late payments and saving time on chasing debt and manually inputting data.
Save time
A key asset for businesses, time is something that you need to spend wisely. But you can spend a huge amount of time chasing up late payments and heading down to the bank to pay in cash and cheques. Switching to card payments helps save you time.
One other area where you could make time savings is with tracking your finances. If you use Sage accounts software and Sage Pay for your payments, the data is automatically synchronised between the two, helping you see what’s owed and saving time in retyping the data. It also reduces errors too.
Reduce security risks
Handling cash is risky. Your business should be taking precautions to ensure this money is safe – and these precautions have costs. By switching to electronic payments, you could lower your insurance and reduce the risks for your business.
Just make sure you choose a provider who is established and has the right security measures in place. As a trusted provider to more than 500,000 businesses across Europe, Sage Pay offers the highest level of card data security, including advanced fraud screening, real-time address and security code matching, and 3D Secure authentication. This helps keep your customers’ data safe.
Counter common excuses for late payments
It’s very hard to claim that “the cheque’s in the post” if you’re paying by card or using a “pay now” button on an invoice. If you offer flexible payment methods, it’s harder for customers to shirk their responsibilities, which can help you to get paid faster.
Want more advice on getting paid faster?
Download our free guide and find out how your business could benefit. Do you think late payments are getting more frequent? What do you do to make sure you get paid faster?
The post Get paid faster: how to minimise late payments and improve cash flow appeared first on Sage Blog.
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