This contributed post is for informational purposes only. Please consult a business, financial and legal professional before making any decisions. We may earn money or products from the affiliate links in this post.
Thirty-percent (30%) of small and medium businesses say that late payments are affecting their company.
If you are having a hard time getting your customers to pay, then this could have a huge impact on your cash flow, and you may even find that you are not able to survive in the current economy.
Know your Customers
There are customers who you can trust to pay on time. There are also however other customers who you know 100% aren’t going to, and it’s your job to do your due diligence. You need to find out as much as you can about a customer before you extend credit, and you also need to do your research too. This will help you to avoid customers who might be a problem and it will also help you to limit the amount of debt you get into over them.
Spell out your Terms
It’s so important that you identify your payment terms. Your customers need to know exactly what happens if they pay late and they also need to know what actions they are going to face. It’s a good idea for you to include this in your invoice so that they are aware of when they need to pay by. You need to be as clear as possible when it comes to your payment terms as well because if you aren’t then this could cause you major issues in the future.
Adding a “please” or even a “thank you” at the end of an invoice can boost your chances of getting paid by 5%. You need to remember that the customer hasn’t paid late yet and that by being cordial, you can have a more positive interaction with your customers. You also have a much better chance of being on top of their priority list when it comes to payments too. If you are still struggling to get your customer to pay then it may be a good idea to research some collection agencies as they may be able to help.
Make it Easy to Pay
The easier it is for your customers to pay, the more likely they’ll be able to do it. You need to invoice fast and you also need to focus on electronic formats too. For example, if you send paper or fax invoices then your customer will have to wait days to receive your bill and they will also need to arrange an alternative payment method too. All of this can cause delays, but if you are able to give your customer an invoice that they can pay instantly then this will really help them out.
Your customer may be going through a hard time financially, and if this is the case then you need to make sure that you are there for them and that you don’t put too much pressure on them. One way for you to make sure that you take the right steps would be for you to send an electronic invoice and for you to set up a payment system so that they can clear their debt in installments.