908-358-4680 | info@beyondfinancialsconsulting.com

  • HOME
  • ABOUT
  • SERVICES
    • PART- TIME CFO
    • SOFTWARE SETUP, CLEANUP & TRAINING
    • BOOKKEEPING OVERSIGHT
    • UNDERSTAND YOUR NUMBERS
  • SOFTWARE
    • QUICKBOOKS ONLINE
    • QUICKBOOKS DESKTOP
    • XERO
  • INDUSTRIES
    • MARKETING & BRANDING AGENCIES
    • MEDIA & INFLUENCERS
    • CONSULTANTS, COACHES & OTHER PROFESSIONAL SERVICES
    • ONLINE BUSINESSES & ECOMMERCE
    • APP, SOFTWARE & WEBSITE DEVELOPERS
  • TESTIMONIALS
  • CONTACT US
  • BLOG
  • HOME
  • ABOUT
  • SERVICES
    • PART- TIME CFO
    • SOFTWARE SETUP, CLEANUP & TRAINING
    • BOOKKEEPING OVERSIGHT
    • UNDERSTAND YOUR NUMBERS
  • SOFTWARE
    • QUICKBOOKS ONLINE
    • QUICKBOOKS DESKTOP
    • XERO
  • INDUSTRIES
    • MARKETING & BRANDING AGENCIES
    • MEDIA & INFLUENCERS
    • CONSULTANTS, COACHES & OTHER PROFESSIONAL SERVICES
    • ONLINE BUSINESSES & ECOMMERCE
    • APP, SOFTWARE & WEBSITE DEVELOPERS
  • TESTIMONIALS
  • CONTACT US
  • BLOG

The Best Payment Terms for Faster Cash Flow

October 16, 2018 In Uncategorized
Tweet
Share
Share
Pin

A great way to speed up your cash flow is to get paid faster by customers who owe you money. One way to do that is to examine your payment terms to see if you can accelerate them. First let’s talk about what payment terms are common. Then I’ll share a study that showed which payment terms generate the fastest payments.

English, Please

Traditional payment terms are spoken in the following format:

Percentage discount/(Days due from invoice date), “Net” (Days due before payment is past due)

An example is 2/10, Net 30. It means to the customer that if they pay within ten days, they can take two percent off of the invoice due amount. If they don’t want to do that, they need to pay the full invoice within 30 days of the invoice date.

You could write “2/10, Net 30” on your invoice, but you will get paid faster if you write it out in plain English.

Industry Standard

If your industry “has always done it that way,” I encourage you to challenge the status quo. Getting your cash faster is important to all small businesses, so don’t let your industry hold you back.

Discounts

Most corporations are required to take discounts if they are offered, so offering an early pay discount might help you get paid faster.

Insights

There are several studies on how to get paid the fastest. Of course they all have different conclusions! FreshBooks advises that “due upon receipt” terms can work against you as most people decide that that can mean anything. They suggest using wording that says “Please pay this invoice within 21 days of receiving it.” Here is their blog post on the topic: http://www.freshbooks.com/blog/the-best-invoice-payment-terms-to-help-you-get-paid-faster-and-more-often

Xero produced a page on the topic as well. Their research suggests that debtors pay bills 2 weeks late on average. They also suggest using terms of net 13 or less in order to get paid within 30 days. Here is their page on the topic: https://www.xero.com/us/small-business-guides/invoicing/invoice-payment-terms/

Let us know if you would like some help looking at and possibly modifying your current payment terms.

Tweet
Share
Share
Pin

Monthly Archives

Categories

  • Accounting (17)
  • Accounting Software (2)
  • Blog (9)
  • Bookkeeping (1)
  • Bookkeeping Tips (5)
  • Business Development (2)
  • Business Growth (8)
  • Business Tips (65)
  • Cool Tech Tools (9)
  • Cost-Saving Tips (1)
  • Customer Service (1)
  • Customer Service Tips (5)
  • Decision-Making Tips (2)
  • Entrepreneur (1)
  • Expense Reduction Tips (3)
  • Finance Management (1)
  • Management Tips (3)
  • Marketing Tips (1)
  • MomBoss (1)
  • Money Management (1)
  • Payroll Tips (1)
  • Personal Development (5)
  • Profit First (1)
  • Profitability Tips (6)
  • Profits (1)
  • Small Business (2)
  • Tax (2)
  • Technology (1)
  • Time Management Tips (2)
  • Uncategorized (46)

 Beyond Financials Consulting Westfield, Summit, Millburn, NJ

At Beyond Financials Consulting, our small business services go beyond preparing financial statements and year-end tax calculations. We take a proactive approach to our clients’ financial needs by working closer to their business than traditional CPA firms. Our top priority is making sure our clients understand their financial results and can make informed decisions.

EXPLORE MORE

NAVIGATION

  • Home
  • About
  • Services
  • Software
  • Industries
  • Testimonials
  • Contact us
  • Blog

CONTACT INFO

P.O. Box 1020 Mountainside, NJ 07092

908-358-4680

info@beyondfinancialsconsulting.com

 

Facebook icon Twitter Icon LinkedIn Icon

Intuit, QuickBooks, and QuickBooks ProAdvisor are registered trademarks of Intuit Inc. Used with permission under the QuickBooks ProAdvisor Agreement.

Schedule a FREE consultation with Beyond Financials Consulting today!

All Rights Reserved © Beyond Financials Consulting 2022. | Professional Site Design by Accelerator Websites | Powered By ThriveFuel