As a small business owner, it is imperative that you get paid by your clients on time. In every business, there are always bills to be paid, salaries to be disbursed and other expenses. In an ideal world, all invoices are paid on time. However, in practice on many occasions there are delays in payment. Let’s take a look at various ways to expedite payments.
Have a written contract in place
Never accept a verbal agreement with any of your clients. Make sure all relevant terms and conditions of the services to be rendered are mentioned in the contract. The contract should be clear and contain what services are to be provided, calculation of payment and late payment penalties and consequences. This way, invoices are likelier to be honored with fewer delays.
Have multiple payment channels in place
This will give your client more options of payment. The usual payment options include PayPal, credit cards, online bank transfer, checks and more.
Don’t wait until the last minute to remind the client to pay. A delay in invoicing leads to delay in payment. Use good invoice software that regularly sends payment reminders to the clients.
Eliminate shirking clients
If a particular client doesn’t pay up the due amount or significantly delays payment, stop working for that client in the future. This will send a strong signal in the industry that your business is firm about prompt payments.
Don’t let relationships come in the way. Sometimes firms are reluctant to be assertive about pending payments because of the close relationship they have with their client. You must remember that you are running a business and need to be professional.
Take legal action
This is a last resort. However it will ensure that you are taken seriously. Future clients will be aware there is a price to be paid in the case of delayed payments.
Give sops for pre-payment
Encourage clients to pay before the due date by giving discounts. This technique has been found to be very effective and widely put in practice.
Sometimes the client simply forgets about your invoice or is in a cash crunch making it difficult to pay up. Follow up regularly with the concerned client over the phone or have a face to face meeting. Do not lose your temper. Be polite yet firm. Discuss how the payment could be made in a manner convenient to both parties. Maybe a partial payment can be made immediately and subsequent payment in intervals.
Timely payment of invoices will make your business run smoothly and have the image of a well organized and professional business entity.