Many businesses struggle to pay bills these days, so it wouldn’t be surprising if your customers have been submitting payments later than usual these last several months. Still, you need to get paid – and on time – because delinquent receivables have a negative impact on your cash flow.
Ways to encourage prompt payment have been discussed in past columns. For example, you can start accepting credit/debit cards and direct bank transfers, make sure invoices go out immediately after a sale, or you can offer a premium like a small one-time discount for paying on time 12 months in a row. You can also assess finance charges on remittances that come in after the due date. QuickBooks provides the tools to allow this.
Setting It Up
Before you start charging extra for late payments, however, you will need to do some setup work in QuickBooks. Open the Edit menu and select Preferences, then Finance Charge. Click the Company Preferences tab. You will see a window like this:
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