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Workbook

Stress-Free Cashflow

A practical guide to future-proofing cashflow
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The Cashflow cycle

A good sales process is critical to setting a solid foundation for getting paid on time. Many businesses are burning time, money and energy chasing overdue invoices when, with a few improvements to their processes, much of this could be avoided.

This workbook covers the six key areas of the cashflow cycle.

  1. Quoting
  2. Onboarding
  3. Delivery
  4. Invoicing
  5. Payment
  6. Follow-up

Use the workbook to assess and rate your business’ processes. You’ll identify areas of weakness and learn how to improve your process. Reducing your stress, freeing up valuable time, and making chasing overdue invoices easier. Sort your cashflow now.

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Meter showing six steps of cash flow cycle.

QUOTING

Set expectations

Your quote is the perfect opportunity to set expectations and stack the odds in your favour when it comes to getting paid on time.

Six key questions to ask yourself when it comes to your quoting process are:

  • Are your quotes created using software?
  • Do your quotes use a standard library of products or services?
  • Are your quotes followed up in a timely manner?
  • Can you prove quote acceptance?
  • Are your terms of business signed?
  • Do quote details flow through to other systems?
TIP: If you can only do one thing to improve your quoting process, then ensuring you can prove quote acceptance (with a signature or email) and that your terms have been agreed to (with a signature or email) this is it. Down the track if you do have any issues chasing payment, being able to prove the customer agreed to your quote and terms will put you in a strong position.

ONBOARDING

Do your homework

The onboarding process sets the tone for your relationship with customers and is an opportunity for you to better understand your customer, their problems and importantly, the correct contacts for key interactions such as approval and billing.

Four key questions to ask yourself when it comes to onboarding customers smartly are:

  • Do you ask your customers to complete a credit application form?
  • Are credit checks run on new customers?
  • Do you collect the key contact details for every new customer?
  • Is key contact information entered into all business systems?
TIP: This is an extremely important step in the cashflow cycle. Credit checks can raise red flags and prevent difficulties down the track if the customer isn’t suitable. It’s also the time to ensure you have the correct contact information for whoever will be responsible for paying your invoices. Too often payment is delayed because invoices are sent to the customer, but to the wrong person who has no knowledge of or responsibility for paying bills.

DELIVERY

Front-foot potential problems

Set yourself up to get paid promptly by doing a great job, on time and within budget. Communicate any issues, delays or budget overruns early.

Ask yourself these five questions to assess how robust your processes are when it comes to fulfilling the job:

  • Do job or order details accurately match the quote?
  • Are customers informed when a job is over budget?
  • Does your team know when a job is complete?
  • Can your customers rate their satisfaction with each job/order?
  • Are disputes resolved promptly?
TIP: Having a clear process to flag and deal with disputes can make a real difference in the speed of resolution and the customer service experience. Often we see disputes only being escalated when payment is chased. To front foot this and uncover any possible disputes, send a ‘pre-reminder’ email a couple of days before payment is due. This can prompt customers to raise any issues which will prevent them paying before payment is actually due. The bonus – if there aren’t any issues, this might get you payment before the due date.

INVOICING

Be accurate

Invoice accuracy is key to good cashflow. Send your invoices often and promptly to avoid any unpleasant surprises.

There are seven key considerations when it comes to a strong invoicing process:

  • Are your invoices created using software?
  • Do you have good invoicing habits?
  • Are your invoices sent promptly following job completion?
  • Are your invoices sent to the correct person?
  • Do your customers receive unexpected invoices?
  • Do your invoice due dates match the agreed payment terms?
  • Are invoice dates set automatically by your invoice software?
TIP: You can set yourself and your customers up for a better invoice experience by ensuring all the basics are correct. Make sure invoices are clear and are sent to the person who pays the bills. Include payment details on them. They should be expected and align with the terms your customer agreed to.

PAYMENT

Keep it simple

Receiving and paying an invoice is an important part of the customer experience. Make it easy for your customers to pay you. Make it easy for them to raise a dispute if required. Don’t let invoices be a surprise event.

When it comes to getting paid, ask yourself:

  • Do invoices include clear payment instructions?
  • Do we offer a variety of payment options?
  • Are payment instructions included in follow-up reminders?
  • Have we discussed preferred payment methods with customers?
  • Are payments reconciled against invoices in a timely manner?
TIP: Keep it simple and make it clear. Asking for and receiving payment should not be complicated. The more complicated the process is for customers the more likely payments are to be delayed.

FOLLOW-UP

Be timely and consistent

Unpaid invoices shouldn’t be left gathering dust. Follow-up communications with customers should be timely and consistent. They should encourage two-way conversation with the customer so you can establish what is preventing payment and find a resolution where possible.

Six important questions to assess your follow-up process are:

  • Is invoice follow-up managed by specialist software?
  • Are invoices followed-up using a clearly defined process?
  • Do staff who chase invoices have sufficient time and training?
  • Are follow-up activities tailored for different customer types?
  • Do follow-up calls agree to an expected payment amount and date?
  • Are team members responsible for follow-up held accountable?
TIP: Timing is key when it comes to following-up unpaid invoices. Build a process so you prompt customers at well timed intervals. Communications should encourage two-way conversation. Aim to agree on an expected payment amount and date. The tone should be more urgent as the invoice becomes more overdue.

REVIEW AND IMPROVE

Getting better cashflow

If you’ve discovered your foundation for getting paid isn’t as solid as you’d expected, some simple steps can help improve cashflow and make getting paid easier.

  • Make sure you can prove quote acceptance and that as part of the quoting process customers sign your terms of trade.
  • When onboarding a new customer, obtain the contact information for the person responsible for paying invoices.
  • Prioritise investigating and resolving disputes. Have a clear process for how disputes will be dealt with before you encounter them. The faster you can resolve disputes, the better your cashflow will be. Plus prompt resolution goes a long way in maintaining good customer relationships.
  • Send your invoices in a timely manner. Send invoices as soon as the job is complete or service is provided.
  • Make it as easy as possible for your customers to pay you. Payment instructions should be crystal clear. They should be easy to see on invoices and where possible ‘pay now’ buttons should be offered.
  • Have a process for chasing unpaid invoices. Staff should be clear about what the message is and when it should be sent (or phone calls made) as any unpaid debt is followed-up.
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stress-free-cashflow-workbook was last modified: October 27th, 2022 by Lucy Stewart
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