Getting paid quickly plays a crucial role in business growth. The faster your access funds, the more money you have to get the necessary resources your business needs to grow. As a grower-shipper, it is left to you to make sure your produce business gets paid as fast as possible. This can often be easier said than done. To help improve your efforts, below are a few tips on how to get paid faster as a grower-shipper.
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Provide alternative payment options
Sometimes payments are delayed not because your customers do not have the funds or are being tardy. Rather, it could be a technical issue. This could be with the customer’s payment service provider or yours. If there are no alternative payment options, such an issue can take a few hours to several business days to get fixed.
There is also the fact that the client might just not be comfortable with your preferred payment option or may be unable to use it at that moment. Without any alternatives, you might lose the sale altogether. Having alternatives increases the chances of having an option the client would be comfortable using.
When deciding on payment options, ensure to include choices such as credit and debit cards, check options, online banking, and cash. This way, you are sure to have all ends covered.
Automate your payment system
Automating your payment system often leads to faster payments. This is because it takes away extra steps in the transaction process. Automated systems reduce the number of steps it takes to send and receive invoices, approve transactions, make and receive payments, and so on.
This also unifies your payment options, making it possible to access them from just one platform. Automation greatly increases the ease and speed of both making and receiving payments.
ERP systems designed for the fresh produce industry, like Silo, provide a streamlined payment solution that benefits grower-shippers.
Provide incentives for early payment
Sometimes, getting customers to make payments as early as possible takes a little push. So give them the little push they need. Incentives are one of the best ways to do this. By providing incentives for early payments (and making your customers aware that these incentives exist), you tell your clients that there is something in it for them. This is usually followed by faster payment.
Incentives for early payments can be discounts on the next bill, extra produce, gifts, etc. Anything of value to the customer would do here.
Send clear invoices and be prompt about it
This might seem like a no-brainer, but you would be surprised how often payment is delayed simply because a lot of back and forth had to be done between the customer and the produce business. This could have been cleared up with a proper invoice. You can create detailed invoices quickly and easily with a simple digital invoicing solution.
When creating your invoice, it is important to note that it is not enough to just have an invoice; the invoice needs to contain all the information your customer needs. This includes the details about the transaction, including what the client is paying for, the quantity purchased, and the cost of each item in the order.
Your invoice should also include preferred payment options (and any alternatives), the payment due date, and the contact details, just in case the client needs to contact you. Once you have such an invoice created, send it to the customer as early as possible. The earlier the customer receives the invoice, the faster they can start processing the payment.
Your customers are only human. They get overwhelmed by dealing with the many distractions and responsibilities the days bring. They too can often forget tasks, including payments that need to be made.
Do not bank on them always keeping your payment due dates in mind. Don’t wait until they remember either. Send them reminders. This could be done with a quick call or even a text message or email. Some online invoicing solutions also provide reminders to clients. Solutions like this are great to invest in.
Leave a clear line of communication
There are always bound to be payment issues now and then. It’s practically impossible for such issues not to exist. Maybe there is a need to adjust prices or a part of the invoice isn’t clear. Maybe there is a technical issue that simply requires time to get fixed. Whatever the issue, there is a need for a clear line of communication between you and your customers, one where you can quickly and easily get in touch and effectively communicate. Without such a clear channel of communication, you likely will waste time, which may end up costing you even more down the line.
Need more capital?
Sometimes, your clients just don’t pay you early enough for you to pay your vendors, which can create a cash gap. Cash inflow can do a lot of good here.
You could try getting a bank loan. However, their characteristically heavy paper documentation and lengthy application processes can be quite stressful, and not friendly to grower-shippers who need to be on ground with the rest of their team. A system designed specially for fresh produce businesses is therefore the ideal working capital source for a grower-shipper.
Some platforms even have discounted interest rates for their existing users. An example is Silo’s Instant Pay. The standard interest rate is 2%, which can drop to as low as 1.5% when you use their platform.