One of the problems some agencies struggle with is cash flow.
Here are three ways you can use to fix it.
#1 Optimize the billing process
From my experience, agencies sometimes invoice clients too late. It’s often because of a complex billing process based on many variables.
You can start by simplifying the process. Is every step needed there? Or could you remove some of them to make it faster?
You can also automate the process.
If you track hours, you can pull data about the time spent per client.
If you track performance, you can pull the data from ad campaigns.
Having all the relevant data in one place lets you calculate the price automatically.
From there, you can automate creating the invoice with a click of a button.
And the faster you send the invoice, the faster you get paid.
#2 Set automatic reminders
If your clients pay late, this one can be helpful.
It’s not that clients are delaying the payment on purpose. It’s often that they are just busy. They can forget about that email with the invoice that you sent them.
Setting up automatic reminders can help forgetful clients pay faster.
From my experience, a good schedule is:
- The day the invoice is created.
- Three days later.
- A week later.
- Two weeks later.
You can combine it with reminders for your team to call the client.
It’s super simple yet effective.
#3 Charge 100% upfront
I hear you say, “Charge 100% upfront? Are you crazy?”
There are two reasons this idea may not work for you.
- Your pricing model doesn’t let you calculate the price before (hourly billing, performance-based, or something else).
- You don’t believe clients will accept that, or you’re scared to do so.
Reason #1 either makes it impossible to apply or makes it require more effort.
Reason #2 is simple to change (yet not easy because that requires a mindset shift).
Charging upfront makes everything easier and the previous methods (almost) unnecessary.
That’s it. Those are the three ways I lately used to help my clients get paid faster.
If you have any questions, just send a message. I’ll be happy to help!