As a business owner, you know how crucial it is to your business to be paid on a timely basis. The better your business accepts today’s technology, the faster you’ll receive payment. A staggering 30 percent of businesses fail because the owner runs out of money.
How to Get Paid Faster
In order to make sure you’re getting paid in a timely fashion, use these 5 simple tricks.
Make your payment terms clear.
Settle your terms and conditions from the get-go, before you start working with a new client. Seek written proof of the agreements so it’s easier to prove amounts due, deadlines for payment and any other important details.
At the very least, ensure your terms and conditions highlight a detailed explanation of the work you’re expected to complete, the payment amount expected and when the payment is due. Include late fees and discounts for early payments, if you offer them.
If you opt not to add penalties or rewards, it’s still best to specify your payment deadlines. Keep in mind that research shows the average customer will choose to pay two week later than the date they’re given. This makes it a good idea to set the deadline for sooner than when you actually need to receive payment.
Make sure customers see your invoices.
Eye-catching invoices are likely to grab the customer’s attention and become a priority for them. Do what you can to banish unpaid invoices by making your invoice stand out. Your invoice should include your business logo and branding, full contact details and the essential information printed in a clear and simple-to-read format. You don’t need to make the invoice elaborate, but it’s best to highlight key information like the amount due and the payment deadline.
Increase your payment options.
Your goal should be to make it as convenient as possible for your customers to make a payment. Small businesses that want to increase their payment options should ask customers which payment methods they prefer. Customers like to offer input about new payment methods, so they can share the best ways to pay you; no one wants debt hanging over their head. Plus, putting your customer first is one of several things successful business do right.
When you accept multiple forms of payment, you make it harder for customers to find reasons they’re unable to make a payment. Go beyond accepting checks and credit cards and think about accepting PayPal and other alternative forms of payment.
Use electronic invoices.
If your business still uses paper-based invoices, you should consider upgrading to electronic invoicing. One positive of electronic invoices is that they’re sent directly to the client, so you do not have to wait for the invoice to be delivered or worry about losing it.
Remember to send your invoices as soon as possible — the sooner you invoice, the faster you will receive payment.
Other advantages of electronic invoices is that they’re easy to customize and edit, they can be sent through email and you can even add a “pay now” button so customers can pay directly into your small business bank account.
Chase late payments.
Want to know the most common reasons customers fail to pay? Because your business didn’t follow up on the original invoice. Sometimes the customer may truly forget that they have yet to pay. But a due payment reminder can help to ensure payment is made.
If the customer doesn’t respond to reminders, send further polite reminders. Highlight the terms and conditions they agreed to with any late payment fines they have accrued.
Or if you utilize electronic invoices and accounting software, set up automatic reminders for payments that are late. They’ll be sent to the customer at timely intervals.
While every business is different, when you adopt these simple and effective practices you will see that your business will get paid faster.
What tips do you use to help your small business get paid on time?