It is probably stating the obvious – but if you don’t ask your customers for payment for the goods or services you provide, there is a good chance they won’t pay you.
A lack of cashflow causes issues for any business and particularly so for small businesses that operate on modest turnover and small margins of profit. It leads to the slow payment of creditors and can, if left unchecked, lead to the winding up of the business.
The problem usually comes about, primarily in small businesses, when the owner is working in the business providing the goods and services etc during the week and the paperwork is done later if there is time.
I am aware of one occasion when a small business was liquidated by an unpaid creditor. On appointment by the High Court, the liquidator identified that some customers had not been invoiced for several months. Once the invoicing was brought up to date, and payment was received, the company was able to pay all creditors and there were surplus funds distributed to the shareholders.
The whole liquidation process, and the costs incurred in that process, would have been avoided if the director had made the time to send out the invoices.
Doing the paperwork should not be seen as something that you do when you get round to it because no matter how good you are at the services you provide, if you don’t get paid for what you do your business won’t survive.
If you want to do the invoicing yourself, set aside a specific time each week to get that task performed. It’s more important for the wellbeing of your business than squeezing in another job.
If you don’t have the time or the skills to do the invoicing, be prepared to pay someone who can. Yes, it will cost you some money, but it will be a small price to pay for having the invoices issued in a timely manner, leaving you free to carry on the work that earns the money in the first place.