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  • Statements and Invoices

    Floral Finance®

    Although computer systems have made the task of processing receivables easier, the decision of when to send out the bill is still yours. Should you send out one statement at the end of a month or invoice more frequently?

    If you're running your business to make the most profit, the answer is very clear. Send out invoices. Weekly, at the very least.

    Here are some reasons why:

    1. Collect Your Money Quicker.

    There's no question sending invoices gets payments back quicker. First, it just makes sense. The sooner customers get their bills, the sooner they'll write their checks.

    But, that' s not the only reason. There's a psychological characteristic at work as well.

    Customers often tend to wait just as long to send you the payment as it took for you to send them their bills. In other words, if you send an invoice within a few days of delivering the product, the customer will most likely pay you within a few days of receiving the invoice.

    However, if you wait two or three weeks to send your customers their bills, they will likely wait two or three weeks after receiving their bills to pay you. That's how it works.

    Sending a bill quickly is not a negative thing. It does show you are serious about collecting payment.

    In addition, the quicker a customer receives an invoice, the closer the customer is to the purchase experience. Good memories of fine service and an excellent product move the customer to pay promptly. The further you move from the purchasing event, the dimmer the memory of your customer.

    2. Greater Efficiency.

    It's easier to process a few invoices or statements at a time on a regular basis than it is to let billing stack up until the end of the month. It's easier to plan for a weekly event, than a monthly event.

    Even for a retail florist who has a large volume of customers to bill, it's easier to schedule the work to send out 250 items per week than 1,000 at the end of the month.

    3. Smooth Cash Flow.

    By billing throughout the month, cash will come back in a constant flow. Fewer dry periods to cover.

    Quicker cash, spread out more evenly. Not bad.

    Words of Caution.

    The way most invoice systems work is as follows: Invoices are sent out during the month. At the end of the month a statement is sent that summarizes any invoices that have not been paid.

    These procedures can cause extra expense and sometimes customer irritation about orders filled near the end of the month. It's a good idea to have a policy of not sending invoices for those orders placed within seven to ten days of statement time. Let the statement do the billing.

    Finally, there are some customers who do not want invoices sent. They just want a statement at the end of the month. Usually these are business customers who order more than once a month from you.

    You'll have to make sure these customers are not sent invoices like everyone else. Fortunately, the software packages available to retail florists today make this easy.

    All customers can be marked as to whether or not they should get invoices. You don't have to worry, the computer will make sure the right ones don't get invoices.

     

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