Picture this, completing work for clients only to find out that outstanding invoices are not only forcing you into the uncomfortable situation of having to chase late payments, but also hindering your business and slowing down growth.
Sounds like a nightmare, right?
If you are worried about facing a situation like this and don’t want to deal with late payments, here are five of our best tips to ensure that you always get paid on time.
Establish firm conditions for invoice payments
While it may seem awkward to sit down with your client and set out strict terms and deadlines for payments at the very start, this will reduce the chances of you receiving late payments in the future. Communication is vital to ensuring that both sides know what is expected of them, especially when this has an impact on businesses and livelihoods.
What conditions to set are completely up to you. A good place to start is asking for a deposit before work, such as 30% to 50% of the total cost, to make sure you have some insurance if payments are late in the future. You can also ask for payment upfront, although this may be more difficult to come to agreement with.
Late payment charges also work as a good incentive for people to pay their invoices on time, but bear in mind that informing clients of this right off the bat may lead them to think that you don’t trust them to make timely payments.
Accept multiple payment options
Make it easier for your clients to pay you by introducing multiple payment options so they have more choices. With how common technology is nowadays, your customers will appreciate being able to pay you online, such as through Paypal, on top of more traditional methods like check.
Accepting credit cards is also another convenient payment method. It’s fast and easy, and your customers are likely to have one. However, bear in mind that if you choose to allow credit cards, there will be processing fees you have to deal with, so it is up to you to decide if benefits outweigh these costs.
Automate invoice reminders
It can be hard managing multiple invoices from different clients at the same time, so automating invoice reminders to be sent out when there are overdue payments can be a good way to keep track of your payments. While this isn’t a surefire way to guarantee payment, it ensures that your clients are made aware of unpaid invoices while saving you the time spent chasing payments.
Be proactive and call your client
If your client isn’t responding to your emails for payment, a good trick is to call your client and speak to them directly. Hearing your voice can create pressure for them, and if you call every so often, they should follow up with payment.
You may find yourself hesitating to chase up your client, but remember that you are entitled to getting paid on time! After all, you have already completed the work and your client should absolutely pay you for your services. Remember this the next time you feel as though you are being impolite or impatient.
Consider invoice financing
If unpaid invoices are hindering your finances, consider signing up for invoice financing services like those provided by Zetl.
Invoice financing is a way for you to get paid early by unlocking capital in unpaid invoices, meaning that you can focus on running your business rather than waiting around for your invoices to be paid.
One of the best things about invoice financing is that it takes virtually no time at all to get funded. Most invoices can get funded within 24 hours of invoice submission, meaning that you can quickly deal with cash shortfalls and take advantage of new deals and opportunities with your funds.