14 Ways To Get Your Clients to Pay Your Invoices Faster
shared by BusinessIntel on Oct 23
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Give Clients Less Time To Pay
Research from a leading accounting software provider shows that just over 40% of businesses now typically ask for payment within seven days. This can significantly improv...
e your cashflow.
Make Paying Early an Attractive Option
Offer a 3% discount if they pay by an earlier date. People love saving money and the lure of a 3% discount will prompt some of your clients to pay earlier which improves your cashflow and reduces the need to chase invoices later on.
Penalize Late Payment
It's also important to impose a late payment fee and to make this clear within your invoice and contract. How much you charge can depend on how important the client is to your business and the nature of your industry
Issue Your Invoices as Fast as Possible
Make it a high priority to issue an invoice as soon as practically possible. The sooner it gets issued the sooner it gets on the radar of the client and the sooner it gets paid. Don't wait until the end of the month or the week. Aim for same day invoicing.
Accommodate a Variety of Payment Options
Clients differ in their preferred payment options so try and offer as wide a range of payment options as possible.
For New Clients Consider Asking For An Upfront Payment
To reduce risk, consider asking new clients for a third of the invoice at the onset of the project and the remainder after completion. You could increase or decrease the upfront payment based on your assessment of the client which could include checking their credit history or rating.
Ensure Payment Terms are Clearly Conveyed in the Contract
Payment Terms need to be stipulated clearly in the contract and key parts listed in each invoice.
Review Your Accounts Receivable Regularly
Tracking invoices and accounts receivable should be done weekly preferably utilising accounting software (such as Quickbooks or Xero) that automates much of the process.
Halt Work If Client Considerably Behind With Payments
If a client is considerably behind in their payments then you should halt further work. This can depend on how important the client is to your business and the nature of your industry however there will be a point at which you have to stop any further work.
Ensure Your Invoices Have All Necessary Information
Your invoice should include a clear description of the work or product, the date it was provided, client requirements such as a purchase order number and contact person, due date, and exact instructions about how they can pay. Failure to provide necessary information can result in payment delay as the client needs to contact you for further information.
Use Accounting Software to Streamline the Whole Process
Accounting software such as Quickbooks or Xero allow you to create an invoice online and send your client a secure link to it and you can see when they have viewed it. Online invoices also allow you to include a "Pay Now" button which clients can just click through to pay immediately via credit card, debit card, or automated clearing house such as PayPal.
Written Quote Accepted By Both Parties
If you have provided a written quote at the beginning of the work, which both parties have agreed to, then this will remove the possibility of miscommunication and misunderstanding when the final invoice does arrive.
Direct Staff Contact Details on Invoice
In case the client does have queries about the invoice, make it easy for them to get in touch with you by including the direct phone number of the appropriate staff member on the invoice. This will ensure any queries are resolved quickly.
Send Invoice to the Right Person
In larger businesses the person who you deal with on a day-to-day basis is likely to be different to the person who actually pays your invoice. Make sure you find out exactly who you need to send the invoices to so they can approve payment without delay.
Sources:
https://www.xero.com/nz/resources/small-business-guides/invoicing/prompt-payment/
https://www.xero.com/nz/resources/small-business-guides/invoicing/invoicing-survival-guide/what-is-an-invoice/
https://quickbooks.intuit.com/r/getting-paid/20-ways-to-get-clients-to-pay-their-bills-and-invoices-faster/
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