10 Advanced Tactics for Fast Customer Payment and Strong Cash Flow (Part II)
10 Advanced Tactics for Fast Customer Payment (Part II)
Small businesses can level the playing field. Use these tactics, get paid faster.
In Part II of this series, we share our final five tactics to shorten business payment cycles that plague growing companies. If you haven’t yet, check out Part I for the first five tips. Though this was written with small businesses and startups in mind, all businesses should follow these best practices for fast customer payment and improved cash flow.
NON-TRADITIONAL STRATEGIES CAN ACCELERATE PAYMENTS IF YOU ARE WILLING TO “BUY-IN” & COMMIT TO THE PROGRAM
#6: Build a real relationship with the AP manager
Invest in building a real relationship with your customer’s AP departments. Get on a first name basis with the AP managers
Call (not email) to communicate. Ask the manager non-work questions at the start of each call before jumping into invoice payment questions
Once the AP team likes you, they will spend the extra five minutes looking into why you haven’t been paid yet
Continue to build the relationship and they will make sure your invoices get approved ASAP
Make friends, get paid faster.
ESCALATION TO INFLUENTIAL DECISION MAKERS IS NECESSARY WHEN THE SITUATION CALLS FOR IT
#7: Connect with the financial decision-maker
A higher-ranking finance employee such as the CFO may be the one who decides who gets paid, instead of the AP Manager
If you find yourself in this situation, leverage your AP department relationship to find out who the decision maker is and contact them
Connect with the decision maker and ask if there are any issues with your invoices and when to expect payment
Be sure to also ask them what are best practices to ensure a frictionless payout for future invoices. Pick their brain as best you can to understand what you need to do to get paid on time
Businesses often have unique finance department org structures. Identify the decision maker.
#8: Lean on your buyer when needed
You may find some customers’ AP / finance departments are completely unreachable. When this happens, look to your buyer for help to resolve payment issues
Connect with your buyer and explain that your company wishes to continue to provide great service without financial distraction
If your buyer values your company’s service, she will help as she realizes you have exhausted all other options
Once you are able to connect with the appropriate AP and finance department contacts, be sure to follow tips #6 and #7 to avoid this situation again
WHEN SLOW PAYMENTS ARE HERE TO STAY, GOING THE EXTRA STEP CAN MAKE THEM MORE MANAGEABLE AND PREDICTABLE
#9: Show up at the door
Some customers pay invoices by sending checks through the post office. This can add one to two weeks delay in receiving your invoice payment as it lingers in the snail mail system
If your customer is local, you can always offer to pick it up in person. It may feel a bit awkward but this is very common practice
In-person pick-up saves your customer money (postage cost) and avoids your check being lost in snail mail
This can also be a great opportunity to meet the AP team in person and solidify the relationship. You may even find yourself being given a tour of the office and getting the chance to meet key executives
#10: Be flexible with partial payment
Sadly, not all customer relationships are rosy and great. You may have had the unfortunate experience of dealing with a customer that is experiencing cash flow issues
If you wish to continue to do new business with them, ask for a partial invoice payment
A customer may not have the cash to pay the full due amount, but surely they have the funds to pay 10%-50% of it right now
Every week, continue to work through partial payments to move the relationship forward and consider formalizing a payment program so that you can get visibility on future payments
Depending on the industry, long payment terms can simply be a cost of doing business. If you’re interested in learning about how Harper can enhance your company’s cash flow, give us a call at (310) 817-0376 or fill out our contact form!