Small businesses rely on prompt invoice payments to maintain steady cash flow and fuel growth. When too many payments come in late, businesses cannot be run properly and fall into jeopardy. Here are some strategies on how you can get clients to pay invoices faster.
The best method is to have customers pay in advance before you undertake projects, but in many industries this is not common practice. As an alternative, request that clients make a deposit or partial prepayment before you begin work. If the project is large, you also may be able to arrange for partial payments at various milestones along the way.
Offer Diverse Ways to Pay
Make it easier for clients to handle their bills by providing them with various methods of payment. Tell them if you have a preferred payment method, but offer other ways to pay in case that method is difficult for them.
Send Out Invoices Promptly
Don’t delay in sending out your invoices as soon as you have delivered goods or completed services. This not only demonstrates your professionalism, but it gets the invoices to clients while the work you have performed is still fresh in their minds. Before you send out the invoices, though, be sure that every detail on them is correct and nothing is missing.
Reward Early Payments with Discounts
Offer discounts to clients for paying their bills before the invoice due dates. Even a modest discount is an incentive to pay early, and the possibility of continuing discounts can keep them with you as loyal customers.
Impose Penalties for Late Payments
To encourage clients to pay on time, impose fees for payments that are made late. Be sure that these penalties are clear in the terms and instructions written on the invoices as well as any contracts that you mutually sign. Additionally, if customers are late paying, follow up on them promptly. Send them reminders when payments are even a single day past the due dates, but remain polite and professional as you encourage them to pay their bills.
For more advice on getting invoices paid faster, contact Evolt Capital.