Are you the CFO of a company and aiming to ensure a consistent cash flow? You're not alone! One of the most crucial keys to achieving this lies in optimizing your invoicing process. By receiving payments from your clients faster and more effectively, you'll enhance your cash flow and secure your company's prosperity.

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Invoicing is an essential process in any business. It's how you pay for what you need to operate your business and how you get paid for your products or services. Establishing accurate and efficient invoicing processes keeps the cash flow moving and ensures not a cent goes to waste.

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However, we all know how important it is to receive payments on time to keep our business running. Yet, this can sometimes become a headache if you lack an efficient invoicing process. This efficiency can be achieved through automation.

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And while automation can streamline workflows, according to a global study by Webexpenses, only 5% of accounts payable teams have fully automated invoice and payment processing. Teams could significantly cut labor costs by using software to automate these tasks. In fact, the same study indicates that 26% of companies are working towards having a fully automated invoice processing system by 2024.

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If you find yourself in this statistic, don't worry. In this blog, we present 4 highly effective options to enhance your invoicing and receive payments more promptly. Get ready to ensure your cash flow and ensure your business's success!

Option 1: A head start for the right beginning!

Imagine receiving a 50% advance for every job you undertake. Sounds good, right? By obtaining an upfront deposit, you'll shift your mindset from scarcity to abundance. Why? Because many jobs come with a gross profit margin of 50%, meaning you'll cover all your costs at the project's outset.

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Moreover, if you manage the job well, you won't have to worry about the next paycheck to pay your employees. Advances are designed to cover your costs and minimize risks.

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Remember, receiving an advance builds trust with the client and reduces non-payment risks. Establishing a trusting relationship with your prospects is vital to securing upfront money.

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Option 2: Invoice weekly for improved cash flow!

How often do you send invoices to your clients each month? If you typically do it only at the end of the month, there's an issue. Invoicing weekly can significantly speed up payment receipts.

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If you have staff who can invoice weekly, you'll make a significant improvement in cash flow compared to monthly invoicing.

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In fact, if you issue invoices on the same day each week, data suggests that sending them on weekends can lead to quicker payments.

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Option 3: Invoice immediately upon project completion!

Imagine you finish a job on the 5th day of the month, but you don't send the invoice until the end of the month, and the client pays you 30 days later. In total, it will take 55 days until you receive payment. During those 55 days, you'll likely have to cover payroll multiple times.

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The ideal approach is to invoice the client as soon as possible, either weekly, at milestones, or as soon as the job is finished. Once you complete a job, send the invoice promptly!

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If you want to receive your money faster, send the invoice on the same day or the next day. Focusing on quicker payment will put you on the path to improving your cash flow.

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Option 4: Invoice by milestones if weekly isn't feasible!

If you can't invoice weekly or upfront, invoicing by milestones is another effective option to maintain a positive cash flow during a large project.

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The timing and amount of payments should be based on specific milestones or achievements you can pinpoint. The payment schedule should allow you to maintain a positive cash flow as you progress through each project stage. This is key to having enough working capital to invest in the next project phase (e.g., planning, design, development, and implementation).

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Keep in mind that you need to stay ahead of your direct expenses. This means getting 50% upfront and receiving the remaining 50% at significant project milestones.

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The goal is to leave the smaller percentage for the final payment when most issues arise.

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Ensure you receive the money before having to cover payroll related to a project.

Achieving this can have a significant impact on your cash flow. Additionally, the larger and more successful your company becomes, the more important this strategy is, as larger companies require more funds to survive and face greater cash flow risks.

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Remember, whether you're a $500,000 or $5 million company, you must meet every payroll. One of the main reasons many small businesses fail is because they spend their time chasing money just to cover the next payroll.

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To improve your cash flow, consider strategies like cutting expenses, shortening collection days, and paying suppliers. Small changes can make a big impact on your cash flow.

Tribal: Automation and optimization for efficient invoicing

With Tribal, you can access financing options that help you maintain your company's operational liquidity and cover necessary expenses to optimize your cash flow. Additionally, it offers a specialized platform for financial automation and optimization that can assist you in optimizing your payment process and enhancing your cash flow. How?

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• Automation: With Tribal, you can pay all your invoices from our platform in just three steps—using your existing credit line. First, choose between national or international payment; then, select your preferred currency and the amount. Finally, enter the beneficiary's banking information. From there, you can track your payment and save information for future use.

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• Reminders and Alerts: With Tribal, you no longer have to worry about payment follow-ups. The platform sends automated reminders to your clients about pending payments, reducing late payments and improving the likelihood of timely receipts.

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• Financial Reports and Analysis: With Tribal, you get real-time financial reports and analysis. You'll have a complete view of your income and expenses, categorize them, and make informed decisions to enhance your business's financial health. Detailed information will help you identify patterns and trends, further optimizing your invoicing process.

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• Security and Confidentiality: The Tribal platform ensures the security and confidentiality of your financial data and your clients'. You can have peace of mind that your information is protected and complies with the highest security standards.

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Don't let financial limitations hinder you from optimizing your cash flow. With Tribal, you can obtain the financial support you need to implement best practices and technologies in your business, achieving a more efficient and profitable invoicing process.

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