Every single business out there depends on getting paid by its clients in exchange for goods or services offered. This sounds simple, but often business owners run into difficulties getting paid all the money they are owed on time. If you’re a business owner, the chances are that somebody, somewhere owes you money at this very moment. If you’re lucky, it may just be one or two people or organisations. But, some business owners seem to have quite a lot of misfortune when it comes to getting paid on time, and find that more and more clients seem to owe them payments every single day. This can have a huge impact on their business. Especially for small business owners, consistent late payments can really damage cashflow and make it difficult to survive. After all, it’s common courtesy to be paid on time, so you know what money is coming in and when. With this, you can plan and budget for the future of your business. This is made nearly impossible if late payments are a common theme! But what can you do about it? In today’s blog post, we’ll be looking at six simple secrets to get paid faster by all your clients. There are some fairly quick and easy steps you can take to help mitigate this problem, so keep on reading if you want to learn more!
1. Can making your payment terms clearer help you get paid faster?
The number one piece of advice that we have to offer here is to make your payment terms as clear as possible to your clients from the outset of doing business together. Having some easy-to-read terms and conditions that your clients must tick to confirm they have read before they work with you is the simplest way of doing this. If you’re finding that this is not enough and you are still experiencing plenty of late payments, it may be a good idea to have the terms in a written document that your clients have to physically sign (this can be done digitally if you prefer, or work mostly remotely).
But before this, the first step if you want to get paid faster is to take a look over your current payment terms. Is it clear what you are offering your clients, and what you expect from them in return? If not, it may be time for a review. Don’t forget to send out your reviewed payment terms to your mailing list of clients so they are aware and get a memory refresh on what you need from them in order to uphold your side of the bargain. It could be that your clients just need to be spurred into action and reminded of their obligation to pay. After all, if they’ve signed the terms and conditions stating your expectations, they must be aware of them!
2. The benefits of invoicing your clients straight away
Next on our list of simple secrets to get paid faster is the speed of your invoicing. After all, if you don’t send your clients an invoice, how can they pay you? It can really help to keep very on top of your invoicing process, and send out your invoices straight away, as soon as you have completed the work or at another agreed stage of the process. You may be surprised just how effective this can be if you want to get paid faster! If you leave your invoicing until a while after the work is done, you run the risk of the client simply forgetting that they even need to pay you, and not seeing your invoice as a priority. If you do it as soon as you can, the work you have completed will still be fresh in their mind, so they’ll have more motivation to pay! Not to mention the fact that payment courtesy goes both ways. If you want your clients to pay you on time, you also need to invoice them promptly so that they can deal with things on their end.
3. One of the most simple secrets to get paid faster by all your clients is to truly understand their processes
Speaking of the way your clients deal with invoices, if you want to get paid faster it definitely makes sense to get to grips with the way these things are processed by your clients and their organisations! This is particularly true of larger organisations who may have whole teams or rigid processes in place to deal with invoices and payments. If the way you are requesting payments doesn’t gel well with these processes, then you are likely to find that it takes longer for them to pay you.
Some simple ways to do this include making sure that you’re sending your invoice to the right person. If you don’t, then it will just have to get passed around the departments and may simply get lost in transit, or be very delayed. Purchase Orders are also often the way that larger organisations deal with payments, and these can take days or even weeks to set up, especially if it is your first payment with the company. In some cases, you may simply need to manage your expectations so that you know payments may take a little longer than usual. Or, it may have the desired effect and help speed things along quite a lot.
4. How can being persistent help you get paid faster?
As with most things in business, communication is a key when it comes to simple secrets to get paid faster by all your clients. The number one way to do this is by checking in and following up as many times as it takes for you to get paid. Firstly, it’s a good idea to check in with your client a short time before you are due to send them their invoice. This will give them the opportunity to clear up any concerns that they may have. It also reminds them that the invoice is coming soon, so that they won’t be surprised and will have time to prepare for it!
But what about when you’ve checked in with them, sent the invoice, and they are still late paying you? Here is where being persistent really pays off in helping you to get paid faster. Never be afraid to chase things up with emails and phone calls if you are struggling to get paid on time. Sometimes, all it takes is a reminder for the client to get your payment sorted. Chances are, they are not being malicious by not paying you on time. They may just be busy and need reminding that your payment is outstanding. For some clients, it may take more than one reminder, but keep on pushing. Refer them back to your payment terms that they agreed to, to remind them of what they need to do. We know that it can be time-consuming to keep chasing payments, so hopefully, the other simple secrets we have shared in this article will help you keep this step to a minimum!
5. Can you offer payment plans to help you manage your payments?
Sometimes, clients end up not paying you on time because they simply can’t afford to pay it all at once right now. This is an issue especially at times like these, where the Coronavirus pandemic has left many businesses, big or small, struggling to come up with the funds they need to keep going. Obviously, you are a business owner yourself who relies on these payments, so you still need to get them through. But there are things you can do to help out and ensure you get your payment too. Would it be possible to offer a payment plan to your clients, so that they can pay what they owe you in instalments? This will make it easier for them to afford it, and you will still know how much of the payment you have coming in and when. This may also help you to win more new business too, by offering clients different ways to pay that suit them!
6. Stopping work may be the only way to solve some payment problems
Finally on our list of simple secrets to get paid faster is, for most businesses, the last resort. If your client is not paying their bills on time, you may just need to stop the work you are doing, or stop from supplying them products, until the time you are paid. This gives non-payers a consequence for continuing not to pay, which may be what they need to take action and pay up. Depending on what you do and offer, many of your clients will be relying on what you do for them to help their businesses run and grow, so stopping your provision of this is a good way to give them an incentive to pay. It can be daunting to take this step. You may be worrying that you will lose them as a customer. But, as long as you politely decline to offer your services until you are paid, and refer them back to your comprehensive payment terms, there really isn’t more you can do. And, if they aren’t willing to pay you on time, are they the sort of customer you’re after anyway?
We hope that this list of simple secrets to get aid faster by all your clients has been helpful! Late payments are a problem in virtually every industry, but by taking some steps to combat them, you should see your rates of late payments go down.
For more information and advice about all things business, why not check out the rest of Chrysalis Partners South’s blog page? We’re dedicated business coaches offering more than 50 proven methods to help grow your business, that work across many industries. To find out more about us, what we do, and how we can help you and your business, please visit our website today.