For most small business owners a ton of their time is spent chasing down customers for late and unpaid invoices. Instead of focusing on growing their business, they are thinking about credit risk and mitigating its effect on their cash flow. What if there was a way to detect and even prevent unpaid invoices or invoices paid late? Well there is. Detailed below is the secret to how small businesses can avoid unpaid customer invoices.
How Small Businesses Can Avoid Unpaid Customer Invoices – Overview
Due to resource constraints, small and midsized businesses (SMBs) are often left to address credit risk issues themselves. In most cases SMBs just accept overdue invoices, too scared to make a fuss in case it alienates a customer. Those with a bit more sophistication resort to debtor tracking or in rare cases report defaults, but both of these are after-the-fact responses to a problem that’s better avoided.
For those who want to get in front of the problem one way is to use commercial credit bureaus. Apart from being too expensive or complicated for most small businesses there is also a fundamental misunderstanding of what bureaus actually do.
Traditional bureaus can tell you whether a customer might be around in 12 months, or might have an adverse action in that time, but they can’t tell you whether a customer is likely to pay their next invoice on time – something that’s of far more importance to your average small business owner.
To be clear, commercial bureaus play a valuable role in helping to understand long term risk but if you’re trying to understand whether Bob down the street is likely to pay the invoice you issued to him last week, credit bureau data isn’t going to be super helpful.
There has to be a better way, right?
Luckily, there is a better way. And that better way is a product called PayPredict created by a fintech company called Evenly. Evenly was started by accounting specialists and data scientists, who created a way to give SMBs a real-time understanding of the risk that their next invoice wouldn’t be paid on time, the impact of any late or non-payments and also provide simple tools to try and mitigate the underlying credit risk.
PayPredict, which points to a revolution in the way that credit risk insights can play a role in the day to day operations of every small and midsized business, meets several basic requirements:
- Couldn’t be too expensive for SMBs
- Would need to be useful for business owners and advisors alike
- Would need to not be time-consuming to realize any benefit
Just as importantly perhaps, it also provides a way for business consultants, advisors, or bookkeepers to finally help their customers get on top of credit risk and many more issues without significant additional workload.
What is PayPredict and why is it such a big deal?
At its heart, PayPredict can tell you whether a customer is likely to pay their next invoice on time, even if you’ve never dealt with them before.
More than that though, PayPredict predicts the likely payment date for an invoice, helps you understand the impact each invoice payment will have on the business, and suggests ways you can encourage customers to pay on time.
While that sounds simple, the impact is actually significant.
Do you really know your customers?
Most SMBs simply don’t know their customers’ business. Of course, they know what their customers do but they have no visibility into any issues customers are currently having, whether those customers are likely to run into any problems in future and, more importantly whether those customers are currently going through a difficult time.
Once connected to PayPredict, a business gets an instant analysis of customers based on their risk. From there Evenly keeps track of client customers 24/7, across thousands of data points, alerting you or your client (if you are a consultant or advisor) the moment something changes that you should be aware of. Think of this as a heads up before doing any work to know whether you should maybe skip that job or think about changing the payment terms.
The next version of PayPredict brings that one step forward and will provide insights into potential customers before clients have even on boarded them. Imagine being able to determine in advance that a customer is not ideal before you’ve put time into chasing them down, onboarding them, doing the work first for them and then spending time chasing unpaid invoices.
As a consultant or advisor, it would be difficult to provide this type of service to SMBs, without even considering the fact that PayPredict tracks thousands of data points in real time across multiple data sources.
PayPredict lets you offer your clients the same outcome – a real-time view of anything credit-risk related they should be worried about – without having to spend more than a few minutes a month dealing with any alerts as they come through.
The most accurate income predictions ever.
When it comes to issued invoices, not only does the Evenly AI engine accurately predict the likely date that an invoice will be paid, it can aggregate the expected payment amounts and dates of every issued invoice and feed that into a 30-day income forecast.
Never before has such an accurate income forecast been available to SMBs to build into their cash flow forecasts.
Simple, fast and proven tools to reduce credit risk.
Knowing the risk of late payment or the impact of it is useful, but the goal is to have this risk and impact as small as possible.
PayPredict helps with that too. PayPredict segments customers and give you ways to send specifically crafted messages that are proven to make them better payers or, in the case of good payers, stay that way.
To do this in a way that saves time, we send anyone associated with a client account a weekly email with a simple task to perform that should take no more than a minute or two. Do that every week and you’ll be on top of your monthly credit risk hygiene.
Many SMBs or contracted third party professional service firms don’t do this type of customer outreach and even if they did it would take time and effort to segment customers and craft the messages. This is all done automatically for your clients ready for you to sort out in just a few button clicks.
Debtor tracking, reporting and more.
Of course, not all bills will be paid on time, no matter how hard you try.
That’s why Evenly has created a dead-simple but effective debtor tracking tool that mixes automated reminders with human intervention to make sure reminders don’t go out if you haven’t recently reconciled accounts or if the business owner has already come to an agreement with the customer about acceptable late payments.
Keeping your clients in the loop is simple too.
You can either invite clients to have full access to the PayPredict dashboard or you can give them a read-only link that keeps them updated but prevents them from being able to action anything.
The change is forever.
Tools like PayPredict are going to change the way SMBs, consultants, advisors, and bookkeepers handle invoicing forever because this tool automates the entire process, which allows you to focus creating a more resilient business, or build a closer advisor/client relationship.
Instead of having to pay someone to do that work or paying hundreds to thousands of dollars a month for similar tools, PayPredict is available for $15/month per account – with unlimited users per account and unlimited tracking of customers and invoices.
Times really have changed and there’s never been an easier way to move compliance clients over to advisory in a way that is both effective and affordable.
How Small Businesses Can Avoid Unpaid Customer Invoices – Summary
As a small and midsized business owner, or a consultant, advisor, or bookkeeper hired by a SMB, it is of the utmost importance to make sure you customers are paying you on time. There isn’t really anything you can do if they aren’t, and it isn’t fair to you or your clients business to have completed contracted work and have to wait around for their payment.
Luckily, Evenly has created PayPredit which leverages AI and machine learning to track invoices and predict whether a customer will pay their invoice on time or if they will pay it period, all while offering an easy to use interface that can help you take control of your cash flow.
If you are interested they are offering a 14 day free trial (with no credit card needed to begin). Follow the link for more information.