How Minority-Owned Businesses Can Use Invoicing to Increase Cash Flow
If You’re a Minority Business Owner Who Bills Clients Using Invoices, Cut Out the Wait and Start Getting Paid Right Away
As a minority-owned business, cash flow is crucial to success. Invoicing is an important tool for increasing cash flow and ensuring that you get paid on time. Invoicing is a straightforward process that can be done quickly and easily, allowing you to get paid faster and more efficiently. With the right invoicing system, you can also streamline your processes and reduce administrative costs. What we’re most interested in, though, is how to use invoices to not just increase inbound cash flow but boost your working capital picture simultaneously.
If you do business with other companies and the government, you most likely issue extended payment terms of 30, 60, or 90 days.
The following will provide an overview of how minority-owned businesses can use invoicing to increase cash flow, including tips on setting up a system, sending invoices, and tracking payments. We also tell you how your minority-owned small business can use a rapid invoice payment system to skip long waits to be paid on client invoices and start being paid within a few days rather than many weeks.
With the right invoicing strategy, you can ensure that your business is running smoothly and making money.
What is Invoicing, and How Does it Help My Business?
Invoicing is the process of sending a bill to a client for the goods or services that they’ve ordered or received. This bill is usually sent along with a receipt or proof of purchase, and the client has to pay this amount within a certain time frame. A paper or digital copy of the invoice is categorized as ‘Account Receivable’ upon issuance. Some companies have entire departments dedicated simply to dealing with invoices as accounts receivable.
This is a standard part of business operations and is necessary for both collecting payments and tracking them. Invoicing is an easy way to put your payment terms in writing and ensure that clients are aware of their payment obligations.
A wide variety of businesses use invoicing, including
- Service Providers,
- Retailers, and more.
Invoicing can be done in a variety of ways, including online, by hand, or by using snail mail. Although it’s most commonly thought of as a way to collect payments from clients, it can also be used to track the progress of your business, including billable hours, expenses, and revenue.
Invoices are not quite an asset until the debt is paid and money is sitting in your bank account, but they can be converted into assets under the right circumstances. This balances out the fact that they are essentially liabilities since your company had already expended resources, labor hours, materials, supplies, and other costs before the invoice was ever issued. With the economy as shaky as it is currently, your business is better off turning that potential asset into guaranteed revenue as soon as possible.
Benefits of Invoicing for Minority-owned Businesses
It’s important to be aware of the benefits of invoicing for minority-owned businesses. These include
- It keeps you accountable to your clients. In order to get paid, clients have to pay you. By using invoicing, you can ensure that you don’t miss payments.
- It ensures that you get paid on time. Clients who receive an invoice will usually send payment within the period specified on the invoice. This means that you’re likely to get paid before your product or service is delivered.
- It helps you track your business’s progress. By tracking your income, expenses, and billable hours, you can see how your business is progressing. This is important for business growth and success.
- It streamlines your business processes. Invoicing is a crucial part of running a business, and streamlining your processes can help you save time and money.
- It helps you collect necessary business data. Invoicing can help you gather important data, including client names, addresses, payment terms, and more.
A Few Downsides to Issuing Long-Term Payment Invoices.
The lack of immediate payment can create cash flow issues for your small business.
Without the quick influx of funds from regular payment cycles, businesses may struggle to cover their outgoing payments and obligations. It is quite possible for a business to be rich in activity but poor in its ability to keep its doors open. That can happen when invoices get out of control.
Finally, if long-term invoices become too common, the business may find itself in a position where the majority of its money is tied up in invoices, leaving it unable to make an investment or take advantage of a new opportunity if it arises.
Steps to Setting Up an Invoicing System
It’s a good idea to take some time to set up a proper invoicing system. This system can be flexible so that you can continue to grow your business as you go.
- Start with a good organizational system. To make sure that your invoicing system is streamlined, you’ll need a solid organizational system. You can use a computer program, spreadsheet, or other software to keep track of your clients and products.
- Determine your payment terms. Before you create any invoice, you’ll want to determine your payment terms. This will help you create accurate invoices and send them to your clients.
- Choose the right invoice format. There are many different types of invoice formats, and you’ll want to choose one that works best for your business.
- Add an invoice summary. Once you’ve chosen an invoice format, it’s a good idea to include an invoice summary on the invoice. This will allow you to quickly summarize the invoice and make it easier for your clients to understand.
- Save all invoices in a digital folder. It’s important to keep all of your invoices in one place so that you can easily reference and track them.
Tips for Sending Invoices to Clients.
Once you’ve chosen an invoice format, you’ll want to make sure that your invoice is easily readable and understandable. Avoid using abbreviations, and make sure that your invoice is legible and easy to understand.
When choosing a payment due date, it’s important to be respectful of your client’s schedules. Select a due date that works for both you and your client.
When sending your first invoice, it’s a good idea to include the payment terms stated. This will make it clear to your clients that you expect them to pay on time.
Be specific when describing the items on your invoice. If you’re invoicing for consulting services, for example, include the name of the client, dates of service, and the number of hours worked.
Now, this is typically where entrepreneurs start to get nervous during the 30, 60, or 90-day wait for clients to pay the invoice. One reason for that nervousness is the atrocious average waiting period for clients to resolve their bills, especially during difficult economic times. Fortunately, your minority-owned business never has to feel nervous about invoicing a client, and we’ll tell you why shortly.
Tips for Tracking Client Invoice Payments
When you’ve set up an effective invoicing system, it will be easy to track payments.
- Make sure that you keep your records organized so that you can easily reference them as needed.
- If you’re using paper records, it’s important to keep them in a safe place. It’s also a good idea to keep them in a fireproof safe or lockbox.
- If you’re utilizing electronic records, make sure that they’re properly backed up.
- It’s important to make sure that you’re tracking payments for each invoice, not just the ones that are past due.
Get the Latest Invoicing Software for Small Businesses
While paper invoices are still a common practice among businesses, many companies have turned to digital invoicing. This is an efficient and cost-effective way to keep track of your invoices, send them to clients, and receive payments.
Online invoicing software comes with many useful features, including a payment tracker, invoice templates, and more. These features can help you streamline your business operations, which can save you time and money.
It’s important to choose the right invoicing software for your business. You want to make sure that it meets your needs and will help you to run your business more efficiently. If you’re using outmoded software, then you’re not taking advantage of the advances in accounts receivable (AR) technology. Computerizing AR will improve how you generate invoices and accept payments, efficiently saving you money.
The latest automated software simplifies all the financial operations your business carries out, regardless if they are incoming or outgoing. Ultimately, its aim is to ensure that you are compensated for the products or services you have supplied.
What to Look for in Accounts Receivable Software
Given the abundance of comprehensive programs available, you may find it difficult to pick the right Accounts Receivable Software for your business. Your AR solution must have the following attributes to be suitable:
- Multi-User Accessibility because it needs to be secure, but if you are the only one who can access it, managing the system can be a daunting task. The software should be able to be used by multiple users under your control – you should be able to set up their accounts and determine what information they can access.
- Additionally, some programs provide the ability to monitor what the users are doing in the system. Prior to making a purchase, check to see how many users the software supports for free and how much it costs to add more as your business expands.
- Go with Cloud-based Accounts Receivable for cost savings and higher efficiency. Incorporating your organization into the cloud makes it straightforward for you to get to your information wherever and whenever you have internet access.
The majority of PC and Mac programs today are cloud-based. The primary concern is to search for those with versatile and disconnected access and reinforcement and security highlights. The cell phone form probably won’t have all the capacities of a work area program, yet it ought to give you the capacity to perform the primary errands.
A few product programs have various applications for workers and proprietors/administrators. Ensure the product works on your stage before you buy.
Common Invoicing Mistakes to Avoid
Make sure that you avoid these common invoicing mistakes.
- Using unclear or incorrect invoice terms. If you’re using invoice terms that your clients don’t understand, they’re less likely to pay you on time.
- Not including an invoice summary. An invoice summary allows your clients to quickly read through your invoice and understand the amounts that they owe.
- Not keeping track of your invoice dates. Make sure that you keep track of the date each invoice is issued, as well as the date that it’s due. This will help you avoid missing payments and being late.
- Not tracking payments. It’s important to track all payments, especially those that are past due.
Choose a Rapid Invoice Pay System to Stop Waiting for Client Payment
Many B2B and B2G small businesses don’t have an official invoice payment system that allows them to issue client invoices and, rather than getting paid as fast as possible, are stuck waiting for weeks or months to get paid. A rapid invoice payment system lets your minority-owned small business get paid much faster, often within a few days. However, if you don’t have one, here are a few tips to get paid on time, if not a little early.
- Make sure that you’re using the right invoice terms. Terms like net 30, net 60, net 90, and cash are all standard invoice terms that indicate how soon the invoice should be paid.
- Use a recognizable invoice name. If you want to get paid faster, it’s important to select an invoice name that your clients will recognize.
- Most importantly, you should register for the NowAccount Rapid Invoice Payment System. If you have not registered your business for rapid invoice payment, then you don’t have much of an option to do anything with your invoices except wait for weeks or months to receive money.
If you set your company up with NowAccount, then you no longer have to wait on your client to pay you and can get paid quickly, which takes the brakes off our inbound cash flow and relieves pressure from your overall working capital.
The fact is that the number one concern of minority-owned companies is capitalization, specifically raising working capital. With a rapid invoice payment system, you can invoice the business or government agency you do business with and know with great relief that you’re as good as paid and will be able to put that revenue to use within days instead of many weeks.
What Are the Benefits of Getting Paid Right Away for Your Small Business?
NowAccount opens the door to financial freedom and empowerment for minority-owned companies that issue invoices to clients by shortening the time it takes to receive revenue for goods and services provided. Sure, for decades, there have been companies claiming to help small businesses out on invoices, but the reputation of ‘Invoice Factoring Companies’ has grown shaky to say the least. To avoid the higher risk, higher costs, hidden fees, underhanded collection tactics, and other downsides of invoice purchasing and invoice factoring firms, take the safe and secure route of opening a NowAccount. Here are just some benefits to your company:
B2B & B2G Invoice Payment that’s Fast as Lightning!
NowAccount pays your business quickly (in some cases, as little as 24 hours, but your want to give yourself usually a few days’ wiggle room in your planning) and will not tease you with a partial payment. We know that choosing Accelerated Invoice Payment means you have neither the desire nor the time available to wait for money that already belongs to you.
Easy, Fast Set-up & Qualifying
Banks and lenders scrutinizing an individual’s personal life, economic situation, and credit record can be a very uncomfortable experience. Most entrepreneurs would prefer to avoid the potential humiliation of being denied and the possible discomfort of being judged.
NowAccount offers a quick, straightforward, and speedy 4-step qualification and installation procedure, with plenty of assistance on hand if needed. This completely removes any anxiety from the equation. If you’re a reliable business operator, you do business with reliable clients, so NowAccount makes it easy for you to get paid without jumping through a lot of painful hoops.
You have the capability to swiftly upload, pick, and follow the invoices of your liking without having to submit your entire customer list. Start today to become one of the wise small businesses that don’t wait for weeks or months to receive payment but instead opt to be paid right away on invoices.
No Holdback Tactics
Invoice factoring companies and discount purchasers normally pay out between fifty and ninety percent of the invoice’s face value when you offer them an invoice.
This practice of not giving you the full amount they owe you is called ‘Holdback’ on the invoice. When they explain it to you, they try to make it look like they are protecting themselves and will pay the remainder later on when your client has paid the invoice.
In truth, the tactic is employed to maximize their profits. They use the money they withhold to make money through asset purchases and strategic investments without providing any benefit to your business.
Protects Your Customer Relationships and Privacy
With NowAccount, your customer will be unaware that you have already been paid despite being offered an extended payment period. They can take pleasure in the leeway of a 30, 60, or 90-day window, yet you will have already obtained payment and can make use of the capital for your daily operations or for further business development.
Conventional and non-conventional lenders may suddenly become part of your customer connections, potentially even going to the point of harassing them without your consent or awareness. This kind of strategy is one of the disguised threats companies conceal in the fine print. Nothing is more detrimental to customer relationships than having a third-party interloper interfering and attempting to collect money.
Makes Your Business More Competitively Flexible
Your small business can be disadvantaged due to an abundance of outstanding invoices and a lack of working capital to purchase materials, supplies, and equipment or hire personnel.
By registering for NowAccount, you will have an influx of cash to be able to bid for contracts with major companies and government organizations. You won’t have to worry about late payments.
You can confidently pitch to work with large organizations and government entities, knowing the fact that you have enough capital to cover the expenses of inventory, production, and delivery. Furthermore, you don’t need to worry about their invoicing rules since you will be able to get paid right away.
‘Non-Recourse’ Invoice Payment Option
‘Non-Recourse’ means that the NowAccount Accelerated Invoice Payment will not come after your company’s collateral or bank accounts if your client delays or defaults on payment. Instead, it relieves you of the responsibility.
Instead of making your financial standing even more unsteady, getting paid without delay improves your finances since there is no loan to worry about and no need to be held accountable should your customer fail to make payment, which is the case when using an invoice factoring service.
Why Choose NowAccount as Your Invoice Payment Resource?
As a minority-owned small business, you have enough obstacles as part of an underserved segment and don’t need issues with cash flow drying up or a lack of working capital due to unpaid or slow-paying client invoices. To strengthen your business position, take restrictions off your inbound cash flow, and improve your working capital position, stop waiting for weeks, or worse, months to get paid for goods and services you’ve already delivered.
Instead, register your company for a NowAccount and eliminate the wait. Empower your business to grow fearlessly.