As a small businessman, you must be aware of the negative effects of late payments and ways to cope with it. If you are not, just read the following fact:
According to some research, 79% of companies were forced to invest more in chasing invoices, 48% of businesses were not able to pay their suppliers on time, and 30% of companies had to bank on borrowing. And, 10% of business organizations got in an abject position to turn down new business.
Now, you must have known how not being paid on time can hamper your business growth. Don’t be overwrought, as our intention is not to drive you distraught, in fact, we are here to fill you with courage and positivity with the valuable tips to maintain your cash flow by being paid on time.
So, a gentle reminder for payment is not the only weapon you need to win the war against your poor cash flow, but there are also other strategies to pay heed and adopt.
To help you with late invoice payment issues, we have given you some priceless tips. These tips will set your business cash flow in an ideal position by helping you receive timely payments.
Here is a collection of 10 tips to follow to get paid on time:
1. A Gentle Reminder for Payment
It’s very important for you to set payment to follow up for your each and every client. Your follow-up should be in the form of a gentle reminder for payment.
A mail can work wonders for your business. You just have to set this reminder right one day before the due date of the invoice and send it to your clients.
For this, you need to rely on an advanced online invoicing software system like Invoicera. This renowned system can set automated reminders to allow your clients to know their payments due before the paying day, which will make them pay on time.
2. Be Punctual in Sending Reminders
Punctuality in payment reminders will help your clients to be mentally or financially prepared to pay you, as it will give them an exact idea of when to pay, allowing them to make arrangements beforehand. Doing so, you will look more professional and leave your clients with a positive attitude towards your company. Irregularity in sending them invoices irritate them. And, mostly, they can’t pay you on time due to not having all arranged in advance. It means your relationships with them will come to an end soon.
If you want to send an invoice 21 days before its due date, don’t forget to send a reminder just one day before the due date and two days after it on not receiving the payment. It will make clear to your clients that their unpaid invoices are taken into account, thus making them pay you on time.
3. Provide Clients with Multiple Payment Gateways
The fewer payment gateways your clients have, the harder it is for them to pay you. Therefore, you must provide your clients with multiple payment gateways so that you can accept payment online easily.
Invoicera, the cutting-edge invoice software is ruling the payment field because it gives over 30 payment gateways, which makes possible for a client to choose one as per their convenience for making payments.
This way, your chances of receiving payments from your clients will increase, and you can have a thriving cash flow by having an online invoice payment regularly.
Using invoicing software like Invoicera is also the best way to keep track of client payments.
| Also read, Switch to Online Payments- Advice of the Decade
4. Don’t underestimate the Power of Discounts and Late Fee
A gentle reminder for payment can be used at its best when you use it to attract your customers to pay you on time with enticing discounts and offers if payment is done. On the other hand, if you keep reminding your clients of late fees and extra charges if they don’t pay you on time will work wonders for your business. Both tempting offers and the warning of late payment fee can play a huge role in improving your business cash flow, as they both will force your clients to make timely payments.
5. Know your Clients’ Financial Capability and Credit History
As a businessman, it’s a must-do for you to have an exact idea of the financial strength and credit history of your customers. Don’t send follow-up emails to those having a good payment track history, doing so may spoil your business relations with them. It’s better to have some patience, as such clients don’t want to get themselves defamed and will likely pay you on or before the due date.
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6. Don’t forget to mention Terms and Conditions
Your relationship depth with your clients should determine the payment policy and terms & conditions to have with them. Addition of such terms and conditions to your invoice is wise. It will help you seem professional and genuine to them, and they will take your invoices more seriously and pay you without any delay. Don’t forget to remove ambiguous language that may give birth to conflicts or confusions in the future.
7. Ask for Payments in Advance
It’s better to send an invoice one day before you start to work on a project. Receiving payments before is awesome, but if your clients don’t pay you, then don’t worry just think that you have begun the conversation, and you will not drive them angry by sending bills immediately in the future. Moreover, think of asking for a deposit before you start a project and being paid for extra costs like travel expenses. It’s the best way, especially if you have a client for the first time taking your services.
8. Choose a Retainer-based Model
If you charge your clients by the project or hour, then you must think of choosing a retainer-based model. Here, your client will pay you the same amount every month for fixed services taking from you. It’s one of the best ways to receive payments on time. Still confused, then read below. If your clients know that they are paying the same amount every month, they won’t pay attention to a bill unnecessarily to ensure that everything is okay, and they are not paying extra.
Moreover, they will find it better to link their bank account to your company account and set the recurring billing once a month to pay you on time. You don’t need to be worried about tallying hours and filling out your invoices with tension. The more manual processes you remove from the invoicing process, the more efficient your billing process will become.
9. Invoice them more
It’s imprudent to wait for a huge pile of debt to build up over a long period of time. You’d better keep asking for payments regularly. A jumbo amount of bill will be almost impossible for most clients to pay. If you are required to invoice every two weeks rather than every 21 or 30 days, talk to your clients about that and make it beneficial for them as much as you can. Doing so, you can make them regular in making payments.
10. Sending ‘Thank you’ message
Showing your gratitude by sending them ‘Thank you’ message will render your business relationship with them much stronger. It could also be in a personalized call from a salesman of your company, allowing them to know that you have got the payment paid by them. This way, your clients will also think that you don’t consider them merely a way of making money, instead of that, they are human to you first, and you treat them as human beings.
Your clear interpretation of 10 tips to make your clients pay you on time is our aim of writing this blog. From sending regular reminders, providing clients with discounts and offers, sending them ‘thank you’ messages, and the like can be a boon to you to improve your cash flow.
Remember that modern advanced online billing software like Invoicera can not only help you receive payments online on time by automatically sending regular reminders to every client, but it will also let you know your clients’ payment records, thus allowing you give discounts and tempting offers as per their capability, thus making them pay you regularly and improving your cash flow.