As small business owners, it’s impossible to squeeze into a work week everything that we “have” to do. There’s never enough time. But nothing should compromise our most important work – servicing our customers.

Get paid faster

Given this understanding, you can’t afford to overlook the simplest way to keep your books in the black: Bill your customers, and bill them on time. I’m amazed at how prevalent this is in a small business.It was brought home to me over the holidays. In talking to a friend who owns their own small business.

We got to talking about the health of the business and the opportunities he and his wife saw for the upcoming year. While they were positive on the growth of their company, they were not so much on their bottom line. After digging a bit – the answer became clear. They weren’t getting paid fast enough. BILL ON TIME AND SET EXPECATIONS FOR PAYMENT.

This small company had no process for billing, none. They sent them out “whenever they could”. So in doing this, they had no expectation when they were going to get paid. This is a cash flow nightmare scenario.  In a typical scenario expect to see cash from a mailed bill a minimum 30 days from billing. (FYI – This can speed up considerably if you email receipts)

Do your customers pay for service when the technician finishes working, or do you bill them?

If you bill your customers, don’t let too much time go by between service and billing. Think a maximum of 5 business days, HVAC is not really on the radar for most people. Right after servicing or installing equipment is the ideal time to invoice. Wait too long, and you’re out-of-sight, requiring follow-up calls and mailings, draining time and money from your office staff.

So, make sure your staff has a clear timetable for sending out bills and collecting payments. Jump quickly on overdue payments. The longer they’re let go, the less chance you’ll collect without significant effort on your part, maybe involving a third party.

What is the most challenging aspect of invoicing/billing for your business? What is the hardest bill you’ve ever had to collect? How do you handle customers who don’t pay? We’d love to hear your stories. Post your stories in the comments and I’ll get them approved quickly.