Regardless of your business type or size, on-time payments from clients are a must to keep the business running smoothly. Late payments can cause severe cash flow problems for any business. Sadly, poor cash flow is one of the most common reasons for failed businesses. If you want to survive, you need to be on top of this area. To help ensure that your clients pay their invoices on time, here are 8 strategies you can implement:
1. Have a strict policy in place: Before you even begin working with a client, set out clear expectations about payment terms and due dates. Make sure the agreement includes language that outlines when the payment is due and what might happen if it isn’t paid on time.
2. Invoice promptly: Sending an invoice immediately after providing a service or delivering goods will help ensure that your clients don’t forget about the invoice. Remind them to pay as soon as possible too.
3. Use technology: Technology can be your biggest ally when it comes to getting paid on time. Automated invoicing and payment reminders are great ways to make sure you get your money on time. Thanks to modern online invoicing tools, you can now send invoices in just a few clicks and have them arrive almost immediately. In fact, you can even customise your invoices with your own branding.
4. Offer discounts for early payments: Offering a discount to customers who pay their invoices early is another great way to entice them to get their payments in on time. This could be as simple as offering a 2% discount for customers who pay within the first 7 days; this will help to incentivise clients to get their payments in quickly, while also ensuring that you have cash in the pot.
5. Offer a variety of payment options: Make sure that you offer your clients several ways to pay, such as by credit card, PayPal or other online services. By doing this, you make it easier for them to pay quickly and conveniently. Rather than seeing it as a chore, they can quickly process the payment using their favourite method.
6. Follow up consistently: Consistent follow-up is key when it comes to ensuring timely payments. Make sure that you follow up with your clients a few days before their invoice is due; this will remind them and allow them to make sure that the payment is processed on time. In many cases, people just forget. With an online invoicing tool, you can set automated reminders so you don’t even need to do it manually.
7. Maintain good relationships: Your clients are people too, and you should always strive to maintain a good relationship with them. If they’re having difficulty making payments, communicate that you understand their situation and can work with them to come up with an alternate payment schedule. Being understanding and empathetic will go a long way in helping to ensure that you get paid on time.
8. Utilize a payment plan: If a client is unable or unwilling to make their full payment in one lump sum, consider setting up a payment plan for them. Set out clear terms and conditions that you both agree to so that each party is aware of the expectations and the timeline for payments. Although this isn’t ideal, getting your money slowly is better than not getting it at all.
By following these eight strategies, you can guarantee that your clients will meet their payment deadlines and you’ll be able to keep your business running successfully. Implementing these strategies, as well as having good communication with your clients, will help keep your business on track and ensure that you get paid on time. Lay the foundations for business success today!