Timely invoicing is vital to a good cash flow management and you should get into a habit of immediately invoicing after the product or service has been delivered. The sooner you invoice your client, the sooner you will get paid.
Follow a well planned process to chase outstanding invoices. If you are using one of the cloud based software for issuing invoices like, Xero, QuickBooks, FreshBooks, Free Agent, Sage One, you can use automatic invoice reminders function. Do not hesitate to send a personal email requesting payment for an outstanding invoice.
It is important that your invoices are properly branded and contains all the important information like, invoice number, invoice date, due date, VAT number, description of product or service provided, quantity, unit price, total amount and VAT breakdown. It must also clearly state your bank details and other payment methods. If you use cloud based software for invoicing, you can integrate payment buttons like, PayPal, Stripe and GoCardless on the invoice. This will make it easier for your clients to make a payment.
If you have specific terms agreed with your clients where your clients pay multiple invoices on a weekly or monthly basis, send them an account statement.
When a project lasts for a longer period than your usual service standards, ask for an initial deposit. Agree payments terms which can spread payments throughout life of the project. This will help you meet project related expenses without having to dip into other cash reserves.
Finally, be fair and respectful to your clients. Maintain a fair, personal, and professional relationship with them and value their feedback.
Following the above advice will help ensure that your cash flow cycle works better for you.