Payments are the cornerstone of a stable and growing business. And, Late payments have become a critical issue for every business as they don’t receive payments on time from their clients. As we know, timely payments are necessary for each of such business in order to achieve the desired outcome. Businesses who get paid on time ensure profitability and sustainable clients in the long run. However, it can be a tedious task to ensure that most of the clients are making timely payments.
According to a report by Intrum, approximately 33% of businesses realized that the late payments threaten the survival of the company and if they were paid faster, many of them would definitely hire more employees. To sustain a successful business, in the long run, you must receive payments on time from your clients for a healthy cash flow.
However, many small businesses are still ineffective in finding a right solution for this problem. In this blog, we will discuss some essential tips to follow up for client payments and to avoid a big deterrent to a healthy cash flow.
1) Define terms & conditions
The payment policy and terms & conditions should be defined as per the relationship with the client. All details regarding the due date and other payment terms should be added to the invoice before sending it to the customer.
You may also use Invoicera for online invoicing which simplifies your invoice process and you will get paid faster without any delay in payments. With this invoicing software, you need not wait in the queue and chasing clients. Thus, it helps in increasing your cash flow.
2) Effective Reminder Mail
A gentle and effective reminder mail is important if you want to avoid late payments issues. For this, you need to set the first follow-up for every client. In fact, you should set this reminder one day before the due date of the respective invoice.
By using an effective invoicing tool like Invoicera, you can even set the automatic reminders which will save your time as well as efforts.
3) Track the Credit history
It is important to know about your client’s financial strength and credit history before setting up a long-term partnership with them. If the client is good then you don’t need to follow-up multiple times for payments. He will never delay in payments. So, be patient with your clients and especially with those clients who are most likely to pay bills on the due date.
You may also use Time Tracking software to avoid all time to track worries and this will keep an accurate log of the hours spent on a client.
4) One-on-one communication
Client satisfaction is the ultimate goal of every online business. To maintain a good and long-term relationship with your clients, you should always speak to them in a positive way or tone. You must do all possible things in order to ensure that your client is completely satisfied. Having a one-on-one communication with the client on a regular basis helps measure the level of customer satisfaction.
However, you can use Online Client Management tool which simplifies your business with its interactive dashboards and customized reporting for client and vendor management.
5) Give Payment Discounts
It is the most innovative way to follow-up with clients. Payment Discounts attract more and more customers towards it. In fact, early payment discounts help in developing strong relationships with clients. The staff member can be trained to offer a prepayment discount on a follow-up call, one week before the expiration date.
To manage a full staff schedule, communication, reporting and beyond, you can use Staff Management tool. It will also keep track of your workforce from anywhere or any device.
6) Regular Billing Statements
For a flawless and smooth cash-flow, you should send out billing statements to the customer along with a gentle reminder of past dues. This is essential to keep the payment cycle short. Giving access to such statements through a self-service portal is also useful in order to save time and resources.
You can use Subscription Billing Software that helps businesses to automate and manages recurring subscriptions generated on regular basis.
7) Set Greeting Message
Sending thank you, messages is essential to help foster your client’s relationship. This could also be formed by a personalized call from a sales personal, recognizing that the payment has been received. Sending “Thank you” messages can help foster happy relationships between the customer and the seller.
8) Client Awareness Management
Your client should be aware of the benefits of making on-time payments. For this, follow-up communication can be used as a medium. These may include discounts for early payment, better price, and priority delivery, etc. Similarly, the customers should be well informed about late charges and interest penalties associated with late payments.
However, you may also use Client Management Software in order to do customized reporting for client and vendor management.
By using the above tools and tips, you can easily avoid late payments issues from the clients. Thus, you can run a smooth business in the long run effectively and efficiently while carrying healthy relationships with your existing as well as new clients. In fact, the basic purpose of invoicing will go in vain if payments are not received on time. Therefore, you must use a good Online Invoice Payment software to completely avoid such issues.
However, Invoicera brings quality services and builds happy relationships in the timely flow of payments. With its powerful online invoicing software, it helps you to reduce the duration of payment cycles and Get Paid Quicker. Also, it keeps a track of each and every invoice and penny pending from the client’s ends and analyzes detailed financial reports. This helps you to better understand the status of each of the client outstanding and resolve all issues including delayed payments.