For your landscaping business to thrive, it must have a healthy and steady cash flow.
You should be setting aside cash to purchase materials and equipment for when you’ll need them. For this reason, it’s vital that you maintain an efficient collection turnaround.
Here are 6 practical ways you can shorten your payment collection cycle in order to keep cash flowing:
1. Know Your Numbers
First and foremost, there is tremendous value in utilizing software to manage your company’s collection cycle and know your numbers. With WintacLawn’s invoicing and accounting capabilities, you’ll know exactly what your company has coming in and going out. Furthermore, now that WintacLawn integrates with QuickBooks online, it’s easier than ever to manage all your financials in one place and by staying on top of your numbers, you’ll know immediately if there’s a lull in your cash flow and why.
2. Smart Invoicing
The benefits you’ll find with invoicing software are endless. Tracking and sending invoices with software is no longer a waiting game. With WintacLawn, you’ll be able to see the jobs you’ve completed that need to be invoiced, which jobs you’ve sent invoices out for, all the invoices that have been paid, and what’s overdue.
When things get busy, you may put off invoicing even though, it’s always the first thing that should be taken care of in order to keep that cash flow coming. Fortunately, WintacLawn makes it easy to get paid faster by offering simple and quick invoicing that doesn’t take you a lot of time - that way you’re less inclined to put it off. With WintacLawn, you will be able to see all your completed jobs in one place to ensure that they’ve all been invoiced for the week or by the end of the month.
We even have a free invoice template to help get you started!
3. Go Electronic
One of the best ways to ensure payments come in on time is to encourage your clients to enroll in electronic payment options, especially if they prefer to have their invoices emailed. Access to a payment link on the invoice will ensure will allow them to take care of it as they’re reviewing it. When you offer instant-pay opportunities, your customers will appreciate the convenience and you’ll enjoy getting paid instantly. Electronic payment options also help to eliminate fraud and bounced checks.
To get this electronic payment option in place for your customers, be sure to check out WintacLawn as we’ll soon be partnering with XCharge so you can provide electronic payment options to your customers and manage your entire business with one app.
4. Mind Your Manners
It’s certainly always best to be polite, but there may be more to having good etiquette than you think. Online invoicing company, FreshBooks recently surveyed its data and found that invoices that contained a “please” and/or a “thank you” were more than five percent more likely to get paid than invoices that weren’t as polite. This could be as simple as saying “Please pay your invoice upon receipt” or “Thank you for your business.”
5. Offer Incentives
With a little ingenuity, there’s always a way to entice your customers to pay early. For instance, consider offering a small percentage off for paying within an early time frame. If you really want to boost cash flow, you might offer an even larger sum for paying for the year in advance. Other lawn care companies have expressed that the cash flow gained from a year’s payment in advance is well worth offering as much as 10 percent off the total bill. That kind of cash flow is particularly helpful in the off-season, when most lawn and landscape companies hit a lull—unless they offer a seasonal service like plowing of course.
6. Include a Penalty
Though it’s always best to go the rewards-and-incentives route first, you should also implement a fee for late payments, if you haven’t already done so. A late fee adds a sense of urgency to the invoice and provides that push that customers might need to pay their invoice on time. If you don’t have an interest charge or a penalty fee written into your invoice, your customers may be more inclined to hold off on making their payment—perhaps paying an invoice that does have a late fee written in ahead of yours. If you have a good customer who made a mistake one month, it’s good business to cut them a break and waive that fee. But if you have a repeat offender who never pays your for your services on time, that penalty is necessary to keep your cash flow healthy.
Altogether or on their own, implementing these 6 tips should help you to shorten your AR cycle and keep the cash flowing. Again, minding your manners, including a penalty, sending electronic invoices, and using software to get all your invoices organized are all effective methods to getting paid faster, easier and on time.