If you are in small business, getting paid quickly is vitally important to your business survival.
The strain of late payers can be enough to put a business out of business.
So how do some small business owners get paid in 5 days? . . .
Invoice from Standard American Petroleum Company and Blommaert J. in Nederbrakel (Photo credit: Wikipedia)
Well, I cannot take full credit for this article because I read it somewhere else first.
But it makes so much sense.
The Story
An online accounting software company noticed that a small group of their clients got paid within 5 days.
Because many small businesses do not get paid for weeks or even months, they decided to check out this anomaly.
What they found is that many businesses delay in invoicing their clients.
They found that a staggering 16% delay 2 months before sending out an invoice!
If you delay, so will they
By sending an invoice straight away, the invoice was paid within 5 days.
Delaying the invoice by 1 week actually delayed payment by 2 weeks!
And it gets progressively worse according to the article.
How does recency work?
By invoicing quickly, you may be taking advantage of the recency bias.
Simply put, the human brain places more importance or relevance on recent events.
And by invoicing quickly, you are emphasising to your clients the importance of the invoice.
What do you think?
Have you had any experiences of this?
Either way, whether clients pay quicker or not, the sooner you get your invoices out the sooner you are going to get paid !
Well, that is quite simple really!
Here is the link to the article: how small business owners get paid in five days
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What should you do now?
- If you are having problems with collecting invoices, try sending invoices out sooner after completing the work.
- Want some help or ideas? Just contact us at Hotpink Websites now.
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Quote
Wealthy people miss one of life’s greatest thrills.
Making the last car payment.
~ Unknown
Remember – How small business owners get paid in 5 days
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