Not being paid promptly can set you and your plans back significantly, which is why it’s so important to devise ways to get paid on time by your customers.
Unfortunately, not every one of your clients will understand that. As such, they might stall on payments until the very last moment.
But if you’re looking to build a positive cashflow, invest in a new project or just build up some cash cover during these uncertain times, you need to be tough on them and insist they pay you on time.
Here is some advice on exactly how you can do that.
Send your invoices on time
This first piece of advice might seem obvious, but it really is one of the easiest and best ways to get your business paid promptly and on time.
Too many businesses let their invoices slip on the backburner, however, and allow them to pile up. What happens then is a lot of invoices go unsent for no good reason.
You know what we’re going to say: get paid earlier by sending out your invoices earlier. Most people will pay you right away – they’re relying on you to tell them what they owe you first. After all, if you’re not bothering to send them out on time, why would you expect your clients to pay you on time?
To send your invoices on time, make sure an individual or team in your business is responsible for them. Set them targets and hold them accountable. Set them up with diaries, notification reminders or cloud accounting software so they’re always on track.
Use invoice templates to speed up the process, too. That way, all you or your team has to do is substitute information, rather than making the whole thing over and over.
Make a payment plan
Our next piece of advice is more dependent on what exactly you do as a business. But, if you’re able to, ask your clients to pay you a portion of the total payment up front. They could then pay some halfway through and the rest upon completion.
A payment plan can ensure that you get a steady stream of cash, even if they end up cancelling, as you’ll still have that initial deposit.
Another potential plan you could set up is a monthly subscription, which also gives you some cashflow security.
Just remember that getting a lot of payments doesn’t necessarily mean getting a lot of cash coming in. So, if you split up your payments, refer back to our first piece of advice and keep to date with your invoices.
Discounts and penalties
Another great way to get paid early is to give your clients incentives to do so.
For instance, you could consider adding penalties to your invoices – only an unreliable client would object to that if they’re warned about it in advance.
On the other hand, you could reward clients that pay early with early bird discounts.
We would always recommend opting for rewards for early payments, as this will encourage a positive relationship between you and your clients – in our experience, a client who appreciates you is more likely to pay up on time than someone who doesn’t.
Contact us at 01525 88 72 77 or send us a message to talk about your invoicing structure.