In my previous post, I shared 10 ways to make sure that you receive your payments on time. While you will have to play by the rules to ensure timely payment, there are things you can do to speed up the process.
1. Offer a discount for immediate payment. A “2/10” discount offer tells your customer that if they pay within 10 days, you will give them a 2 percent discount. Think of this like a credit card transaction where you can easily pay up to a 3.5 percent commission to the credit card processor.
2. Include an electronic payment option on your emailed invoice. If there is a button that allows a customer to remit by PayPal or through Stripe, your customer may take care of your invoice before others that require written checks.
3. Invoice promptly. This may seem obvious, but if you are extremely busy at the end of the month and miss a cutoff date, you could wait another 30 days for your cash.
4. Make a few select calls. If you do have a great working relationship with someone in the accounts payable department, you may be able to get them to accelerate the payment process. Don’t try this too often with the same customer, however, because if they begin to think you are chronically cash-short, your customer may worry about your ability to stay in business and this could cause them to look elsewhere for catering.
What This Means
If you do $1 million in catering sales per year, you need to be prepared to have floating receivables that could reach the $100,000 mark. While it may feel great to know that within 30 to 60 days you will have $100,000 in your bank account, this obviously can cause cash-flow issues.
Michael Rosman is founder of The Corporate Caterer, a membership website, training and consulting company for caterers and restaurateurs and who want to launch, or grow their corporate drop-off catering business. Michael has over thirty years of experience in the industry and has built an almost two million dollar a year corporate drop-off catering operation from the ground up. Michael can be reached directly at: [email protected].