As a small business owner, you work incredibly hard to make sure your clients are delighted with your services and that your employees are satisfied in their work. Late payments make your job even more difficult. If you’re not being paid on time by your customers, it impacts your own cashflow and can make paying your suppliers and employees difficult. Xero’s research found that 64% of small business invoices are paid late, with the average delay being 8.2 days. Thankfully, Xero have been hard at work for years developing strategies and tools to help small business owners resolve late payments and mitigate their impact.
Prompt payment reminders
Xero’s invoicing feature is one of the most effective ways to avoid late payments. This allows you to schedule an automated payment reminder to be sent to your customers before the payment is due. These reminders can be customised and scheduled to be sent at regular intervals to gently remind your customers to pay on time. This can save you valuable time and improve cash flow by reducing the number of late payments.
Late payment fees and interest
In addition to sending reminders, Xero also allows you to add late payment fees and interest charges to your invoices. By setting up these fees and charges and drawing attention to them ahead of time, you can encourage your customers to pay on time and discourage late payments. This can help you to cover the cost of any additional admin work you may need to do to chase late payments.
Automated payment tracking
Xero’s payment tracking feature helps you to keep track of who has paid and who hasn’t. This feature updates your accounts in real-time when payments are received, which helps you to keep on top of your cash flow. You can also see which customers have a history of late payments, which can help you to prioritise your efforts to chase overdue payments.
Xero also offers an invoice financing feature, which allows you to get paid upfront for your invoices. With this feature, you can sell your outstanding invoices to a lender who will pay you a percentage of the invoice value upfront. This can help you to avoid cash flow problems caused by late payments and ensure that you have the funds you need to run your business.
Automated bank feeds
Xero’s automated bank feeds allow you to see all your bank transactions in one place, which helps you to reconcile your accounts quickly and easily. This feature helps you to identify any late payments quickly and take the necessary action to chase them. By having a clear picture of your finances, you can make informed decisions about your business and take steps to avoid late payments in the future.
Xero’s features are designed to help you to avoid late payments and improve your cash flow. By using these tools and features, you can automate many of the administrative tasks associated with managing invoices and payments, which frees up your time to focus on growing your business.
If you’re looking for practical and comprehensive accountancy services for your growing business, Bells Accountants are the team to choose. We provide for all your accountancy needs including getting you up and running with Xero so you can stay in touch with your finances and effectively resolve late payments. Bells offer bespoke one-to-one, Xero training, can help with set up and conversion from existing software and are a Xero Gold Partner, so can offer our clients a 5% discount too.
To get started, give our team a call on 020 8468 1087 or email .