Cleaning and maintenance businesses need to manage their bottom line assertively in the current economy.
However, a recent survey reveals many small businesses are missing the boat in some areas of their accounts receivable practice.
Is your business one of the 43 percent of small enterprises in need of a cash management makeover?
Western Union Payments'' inaugural Small Business Barometer found in the fourth quarter of 2011 that 43 percent of the businesses surveyed reported falling behind on their invoicing at least every few months.
Another 37 percent cited managing past-due invoices as the worst of their business responsibilities, and 24 percent worried about the risk of ruining a client relationship through the collections process.
In brief, a perfect storm of client relationship concerns and less-than-effective receivables collection processes.
If you see your business in these statistics, you shouldn''t feel overwhelmed.
While invoicing and cash management is critical to any business success — according to Dun & Bradstreet, a leading provider of credit, marketing and purchasing information and receivables management services, 90 percent of business failures are due to poor cash management — there are ample tools and simple-to-implement tips that make this area of business easier to navigate.
In particular, the consumer''s preference for web-based payments translates to streamlined, cost-effective processing that can also help build relationships.
The real key to a cleanly implemented accounts receivable and cash management process is simple: Deploy an automated receivable solution that is easy for your business and convenient for your customers.
The following tips will help you streamline your business'' accounts receivable practice:
• Make it easy for your customers
Providing a web-based resource, such as an online payments channel, will help to increase the likelihood of on-time payments.
The important thing is to get paid as quickly and fully as possible by giving your customer an easy, convenient process that allows them to pay you in a way that meets their needs as well as yours.
Web-based payment solutions offer anytime-anywhere convenience for the customer and often reduce man hours involved in processing and tracking payments.
Convenient invoice processing is also a good customer service strategy and can often increase the amount of positive time your client spends on your website learning about your company — think of this as "stickiness."
This is especially true for regular customers.
• Make it easy for you
The Western Union Payments Small Business Barometer found that 26 percent of small business owners use no accounting system.
Talk about doing it the hard way.
Make your life easier and consider automating the process.
Web-based payment solutions streamline many of the processes entrepreneurs have stumbled over in the past.
Electronic invoicing and online payment acceptance are tools that can help to reduce late payments, shortening your payment cycles and freeing up your valuable business time for other pursuits.
Look for a system that allows you to create a reporting schedule and update it regularly with an integrated customer relationship management (CRM) function.
This CRM tool will help you better understand your customers'' purchase history, preferences and challenges.
Over time, this information will allow you to translate your customers'' invoice paying practices into stronger customer relationships and increased sales.
• Make it part of your brand
This is yet one more customer relations touch point you can use to positively reinforce your brand image.
Use your receivables system to create consistent, friendly checkpoints that enhance your relationship with your clients.
Include helpful hints in your invoices, and ask your customers what other services or products would be helpful to them.
You can customize information for your business.
Contests, surveys, "Thank-yous" and company news all have their place in the billing cycle.
Don''t forget that payments are still an aspect of your brand, so they should align with any customer communication that you have in place.
You can ensure a consistent brand image and messaging across all channels by automating these interactions as much as possible.
Payments handled well can actually translate to more profitable customer relationships by increasing customer satisfaction.
• Make it recurring
Set it and forget it.
Recurring payments make it easier for both you and your customers while decreasing late payments.
Once you''ve set it up, you''ve eliminated the monthly busywork involved in invoicing, errors that can occur as you manually invoice and the awkward and time-consuming follow-up required for late or unpaid invoices.
You can actually present recurring payments as a helpful customer service, saving your customers time and expense by cutting the number of checks they''ll have to mail and eliminating any chance of late fees or other penalties.
• Make it green
"Going green" can save you time and money while making you and your customers feel good about helping the environment.
Web-based and mobile tools eliminate paper while saving you time and money and ensuring accuracy with your customer.
These tips will help your company get its receivables practice under control, dispel any misconceptions about invoicing and create a customer payment relationship that benefits your business and the companies it serves.
David Shapiro is Western Union''s senior vice president of global consumer financial services. For more information about how Western Union can help you perform an accounts receivable makeover, visit http://SmallBusiness.WesternUnion.com.