Changes coming soon to the U.S. Postal Service will slow payments from your clients. Take steps to minimize the impact now.
You may have heard that the U.S. Postal Service had decided to scale back operations and eliminate next-day first-class mail delivery. Then there are continued closings of smaller post offices.
The Postal Service has little choice. Congress has the ultimately control and there isn’t enough money to keep up with the cost of service delivery. Unfortunately, that doesn’t help you and your business. According to REL Consulting, the elimination of next-day first-class delivery alone will slow customer collections enough to cost a typical large U.S. company up to $100 million a year.
The impact on a small company won’t be anywhere near as large, but it could still hurt. And if there’s post office near a client, sending invoices or receiving payments could become even more difficult.
If you rely on traditional mail for your business, here are some steps you can take to help avoid an impact to your cash flow:
- Invoice faster — Many companies are sloppy when it comes to sending invoices for work completed. Avoiding paperwork is no longer an affordable luxury. Invoice immediately to reduce to a minimum any delays in customers getting your invoices and you receiving their checks.
- Offer incentives for early payment — Providing a slight discount for quick payment is an old practice. Make use of it and ensure that your customers realize it exists. But first determine what kind of delays you’re facing and be sure any discount you offer doesn’t actually cost more money than it recovers.
- Change payment terms — In the b2b space, payment terms are difficult to phase out. But you can try reducing them or instituting penalties for people who pay late. Shortening the period by a few days might be all that you need.
- Accept electronic payment — Such companies as Intuit, Western Union, and PayPal offer mechanisms to let companies take electronic payments, whether credit cards or e-checks. Have customers use a secure Web form instead of mailing a check. They save the postage and you get the results faster.
With some planning and minor changes in your business processes, you can minimize any negative impact and even improve your receipts and cash flow.
