8 Tips to Get Paid Faster
Too many small business owners feel powerless when collecting payment from their clients. They don’t need to. Use these tips to adjust your invoicing practices and you’ll rein in those serial late-payers and bring dependability to your business’s cash flow.
1. Ask Nicely.
Data collected by invoice software Freshbooks suggests that, with a little courtesy, you can increase the likelihood of payment by 5 percent. That’s a sizeable reward for a few please and thank you’s – and it reflects well on you and your business.
2. Make Payment Terms Absolutely Clear.
What forms of payment do you accept? When is payment due? Are there late fees? The answers to these questions, and any questions specific to your business, should be clear, conspicuous, and in writing. That makes it easier for the client to pay, and if they don’t, you can point out that they had all the necessary information ahead of time.
Consider speaking with your client about their expectations before defining these terms. Listening to the client and building mutual understanding will make them more likely to meet your payment terms.
3. Short, Specific Payment Terms.
With modern communication 1 or 2 weeks is a more appropriate payment window than 30 days. Use exact terms like 7 days, and even include the date payment is due on your invoice.
4. Invoice ASAP.
Some small businesses let smaller administrative tasks like invoicing fall by the wayside. But you shouldn’t think of a job as finished until the invoice has been sent. Don’t expect promptness from your clients if your business isn’t prompt.
5. Streamline the Invoicing Process.
Help yourself by investing in invoicing software. Making it easier to send out clear invoices will encourage you to keep on top of them. You should also number your invoices. Numbering invoices simplifies accessing billing information so you always know where a client is in the billing process.
6. Address the Invoice to Whoever Pays It.
Often the person who ordered the work will not be the one paying the bill. Ask your clients who is in charge of accounts so you can send the invoice to them directly. It’ll make both your jobs easier.
7. Send Reminders Before and After the Payment Date.
Some invoicing software gives you the option of automatically e-mailing your clients to remind them that their payment deadline is coming up. You might also consider calling your client. At J. D. Factors, we suggest asking your client about their satisfaction with your work, and then gently reminding them of the payment date. If they still miss the deadline, politely but firmly, remind them.
8. Late Fees.
If you clearly stated late fees in your policy, then there’s no reason not to apply late fees. Applying late fees shows clients that you mean what you say, and that you haven’t forgotten about them. However, if first time offenders ask for leniency, consider waiving those fees – they’ll be grateful.
Revamping your invoicing practices can have a dramatic impact on your cash flow. Be clear, consistent, and quick, and your clients will do the same. Struggling to collect on an invoice? Call me, the “Cash Flow King” for help at 800.263.0664 J D Factors Canada, 315 Matheson Blvd. East, Mississauga, Ontario L4Z 1X8.
Visit our website, www.jdfactors.com.☚