Cash is definitely important for any small business specially digital agencies. A liquidity crisis puts pressure on both, the employees as well as the growth of the company. As a digital agency you must make sure you receive cash for the work you are doing.
An advance is usually preferred but in case the client cannot pay a 100% advance one must insist on at least 50% of it. Cash should always be preferred as opposed to barter. Remember, a retainer client is always preferred to a project based client as you get regular revenue and this will save you a lot more time. Using a recurring billing software with an auto bill profile makes sure your bill reaches the client automatically during the month end and you get paid immediately as well. Always make sure that you have done a thorough referral check for each client about how timely his payments are.
In can you do not get paid on time use the late fee tool. This helps you in deterring clients from paying late. . Sending estimates and receiving approvals on them is very important in case of each and every invoice. Besides that you must also receive purchase orders for the work to be done. Sending regular reports to the client helps reduce the chances of disputes with respect to the services agreed upon. Setting a benchmark for your bank balance helps to keep your agency on the safer side. It’s wise not to use the bank credit too much. You can use it wisely and selectively so that your firm does not completely get dependent on it. Be careful about the interest costs while using bank credit.
You should not keep a similar billing cycle for all clients. This will help you with cash on regular intervals. Keep a due date for each client. After 30 days, you must start calling them up and start following up with them. Invoicera helps you preview your outstanding while sending an invoice to a client. At this time you should know the level of escalation you need to do. If the some of the payments have not been done even after 60 days on a 30 day payment cycle you must consider stopping the services until the payment is made. If the payments are still not recovered, you may consider talking to legal experts.
Keeping in touch with the accounting department of the client helps you get your payments faster as well. Do keep a close watch on taxes and salaries so you can plan your cash flow well. Invoicera also helps you with employee permissions and expense management. You can approve and reject expenses from a single dashboard and keep them under control.