When you go above and beyond for clients, you expect to get paid just as fast. The biggest disappointment for a small business owner is when those expectations are not shared by the client when the invoice is due for payment.
Staying silent and hoping they will pay on time out of courtesy is not the way forward. You need to find a better way and fast, so here are our top tips on how to get your clients to pay on time…
- Make it Convenient:
Arrange a set date each financial period when it is convenient for your client to pay, ensuring they are expecting and prepared for the invoice can also ensure they pay it on time! This tip also shows your clients that you are flexible with when they pay and that you want to make the transaction as easy and stress-free as possible for both of you.
- Using technology:
Stop using paper to send your invoices as it is a prone way for your clients to make excuses as to why they haven’t paid I.E It got lost in the post. Instead, offer them an online invoicing process with the ability to pay there and then. There are plenty of online cloud-based accountancy and invoice websites. Some of these include Xero; The Sage Group; Go Daddy also Chaser a credit control software. Chaser and Xero are seamlessly integrated meaning that you won’t have to input and data as it uploads automatically from Xero.
Go Cardless is also a renowned website which chases your payments for you o ensuring you spend no more time following up late payments.; late payments or bad debt. Like chaser, you can also import all of your information from other websites, whether that be Xero or Sage 50.
We have many clients within our business centre that are always willing to help small business. If you would like any information then just email us on email@example.com and we will pass on your information.
- Switch to a recurring billing:
If you’re the type of entrepreneur who has different billing dates each month, then you may need to rethink your strategy. However, if you choose to partner with a recurring invoicing system, you may find that your client remembers to pay on time EVERY time.
- Nurture your client’s relationship:
If you have a good relationship with your clients then you should have respect when it comes to getting paid on time. If you both get to know how each other work then it will make it easier if you need to pick up the phone and ask about your payment.
- Speed up your invoicing delivery:
If you improve your payment delivering terms to every two weeks rather than monthly or even weekly. Then this may help the client by training them to become timely with payments. Meanwhile, you get paid more often so timing becomes less of an issue because your cash flow will also improve.
- Reward early payers:
Instead of an “overdue fee” implement a system that takes a set percentage of your client’s bill if they pay within three days or less of receiving the invoice. This may seem like your losing money but will strengthen yours and your client’s relationship as then will pay early because who doesn’t like a cheaper bill!
- Get expert advice:
Every small business owner has the same approach when running their business “Hands-On”. But if the cash flow is a growing concern, then take a cue from bigger Companies and contact a financial advisor. They can provide the skills, information and discipline you need to get your finances back on track.
- Collecting overdue accounts:
Despite your best efforts, there will likely come a time when a client will miss a payment deadline. How you react and respond to the situation can make a big difference.
The number one step is to get in touch immediately! You may feel like you should wait and hope they pay. However, with each passing week, you’re less likely to get paid.
After 30 days, start charging interest. You should have a payment policy which will specify your terms of overdue payments. Be sure to include your late payment fee on any subsequent invoices you send.
Continue getting in touch with your clients as they will need significant “nagging” to make their payment. Every time you get in touch with your client make sure to indicate your payment terms and the amount of interest that has occurred…