Managing your business payments and finances
For any small business to run smoothly, it must be able to efficiently make money. That much is obvious, but are business owners and free-lancers doing enough to ensure their finances are kept in the black?
The Federation of Small Businesses reported in 2016 that 50,000 businesses every year go out of business due to late payments. And while many business types will require up-front payment before providing their service, the importance of maintaining a solid financial plan cannot be undersold.
Make it easy for clients to pay
When a would-be client is looking to book your services, if they are presented with a request to make a bank transfer into your bank account, this isn’t likely to instill much confidence in your business. Instead, provide your customers with a simple payment and booking process as possible.
Many payment-handling software systems are out there that would benefit small businesses. Programmes such as Worldpay, Stripe and Shopify are designed to help SMEs manage their payments, with all transactions protecting both you and your client.
Once your client has paid for your services, providing them with that confidence that their payment is being handled professionally is important. Many of the above software solutions will do it, but ensuring your customer receives a receipt for their purchase is a great idea.
This could be a physical receipt or come in the form of an email. Either way, not only will a bespoke, branded receipt look professional, but it will also aid your book-keeping and act as evidence in case of any disputes between you and your clients.
Don’t slack on your money management
Accounting and looking at figures left, right and centre, might not be for everyone, but if you are running a small business it’s a necessity. Ensuring you stay on top of your incoming and outgoings is vital. Knowing when money is coming in to your business and where from ensures you can make stable decisions about your business’s finances.
Use a dedicated accounting software to keep tabs on everything. And remember, just because you have a bumper week, don’t go splurging on business outgoings. It’s likely that a quieter period could be around the corner. Having an idea of your cash-flow situation will ensure you never get carried away with your finances.
Offer incentives for block-buying
Everyone loves a bargain, and your clients are no different. Why not give them the option to bulk-buy? Whether you are providing dog walks, personal training sessions or massage treatments, giving a customer a discount, or freebie, when they pay for multiple sessions at once is very rarely a bad idea.
Not only will this type of offer prove popular with your clients but is also guarantees some early income. By taking payment for three, six, ten, sessions at once, you provide yourself and your business with added contingency should your income flow dry up slightly.
Maintain a good relationship with clients
One of the simplest ways to ensure a seamless financial transaction with your clients is to maintain a good relationship with them. By making things easy for them along the way, it’s likely they will do the same for you.
If a payment fails to go through, don’t just ignore it and cancel their booking; get in touch to see if you can help. Maybe you could operate on a credit basis if you don’t already do so? Just remember to have a good credit policy in place which clearly states how long you are prepared to wait for payment and what happens if it is not received in time.
Fancy software and great offers will help but often there is no substitute for straightforward good customer service.