Chapter 4 of 8

Accept payments in ways that suit you and your customer


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Small business guides > The invoicing survival guide > Accepting invoice payments

Accept payments in ways that suit you and your customer

Not surprisingly, the easier you make it for your customers to pay you, the faster you’ll get paid. You can offer several options, from cash or cheque and internet banking transfers to online payment services. In this chapter, we’ll show you the options for accepting payments.

accepting invoice payments by cash or cheque

Getting paid in cash or by cheque

Paying in cash or by cheque still suits some customers, but it does mean a trip to the bank and a bit of a delay before the payment is deposited.

Unless you’re disciplined about recording the invoice as paid straight away, it’s easy to lose track of who’s paid. If your bank doesn’t reliably enter the reference details you supply into their system, you may be none the wiser when you check your bank statement or bank feed. It’s incredibly frustrating to see a payment on your statement with no way to identify who it came from.

internet banking invoice payments

Receiving payment by internet banking

If you provide your bank account details, customers can make a one-off or regular payment using their bank’s internet banking software. It’s convenient, but customers must be in the same country. They’ll also need to log into their online banking to enter your bank account number, the amount to pay, and reference details. So there’s room for error.

mobile payment invoice payment

Offering online payment, pay now, services

If you send online invoices that link to payment services like Stripe or GoCardless, it’s easy for your customers to pay immediately on any device. When they open the invoice, they simply click on the ‘Pay now’ button. It makes life easier for your customers, and you’re more likely to get paid faster.

Online payment services cost nothing to set up, though there’s a small fee for each transaction. But when you look at the improved cash flow, online payments make it better for you and your balance sheet.

One in five businesses that use Xero to send invoices offer an online payment service and Xero research confirms that they get paid faster. In the UK, they‘re paid up to 50 percent faster or about 20 days sooner on average.*

* Xero invoices that were due and fully paid between July 2016 and January 2018.

invoice financing icon

Using invoice financing

If you need the cash and you can’t wait for customers to pay you, you could consider invoice financing. It’s faster and more flexible than taking out a loan.

Invoice financing is offered by some finance companies. They’ll typically advance you 80 percent or 90 percent of your unpaid invoices, so you get most of what’s owed to you then and there, instead of waiting for your customer to pay. And you only repay the amounts financed as and when the customer payments come in.   

Invoice financing isn’t a regulated industry so you need to find a reputable provider and do your homework into the fees and other terms. It’s worth talking with your accountant first about whether invoice financing is a sensible option for you.


Chapter 5: Sending late payment requests

Following up late payments isn’t a job anyone likes doing. It often gets put off in favour of easier or more enjoyable tasks.

Read chapter 5