No matter what field you’re in, wherever you are in the world, this is one of those issues that bugs every single business owner. Ever.
Late paying clients. We hate them! Not only is it a huge annoyance to have to constantly chase people to pay up and keep nagging – it can create a serious drain on your business resources.
Especially when those late invoices start to add up. For a small business or a budding entrepreneur, all those late paying invoices can seriously hold back your potential to grow, because you’ll never have any spare capital around to re-invest into yourself.
If you’ve been in that situation and never want to be there again, read on. I’ve got some awesome tips for you to make sure clients pay – on time, every time.
1. Use cloud invoicing
Cloud technology is amazing. You can have access to it virtually everywhere, from nearly all of your devices.
From your smartphone to your laptop and tablet, you’ve got instant access to anything you need. And there are lots of great invoicing and payment processing apps around that let you do this really easily.
Need to send an invoice through after working with a client on-site? Don’t just wait until you’re back in the office to do it. You can send it to them while it’s still fresh in their memory, by using your phone.
You can even process card payments using some cloud-based apps, which makes it even quicker when you need to process small invoices from clients in person.
2. Invoice on time
As much as we all like to get paid, not all of us enjoy the paperwork side of it!
And invoicing can get to be a real chore, especially when you’ve got lots of clients to invoice after a busy few weeks. It can be tempting to keep putting it off, until you realise that you’re owed a huge amount of money that you never even billed for!
Late invoices can create problems on both sides.
For clients, it can be just as hard for them to manage their cash flow. If they’ve planned work with you and you don’t invoice on time, they may not have that money to hand when you do eventually get around to sending the bill.
So set up a schedule to break it down, and make it easier. Rather than waiting until you’ve got a huge backlog of bills to send out at the end of a month, try to do a few at a time every week. That way you’ll get a regular stream of clients paying – on time!
3. Offer rewards – or penalties
Another great incentive to get people paying on time.
The prospect of an extra perk or two. It doesn’t have to be much – perhaps you can throw in a free promotional product for customers who pay promptly, or, if you can afford it, an extra discount.
The flipside to this can be just as effective. The prospect of being hit by extra charges.
You can do this incrementally. For every week or month that the payment is late beyond a certain date, you can threaten to add on an extra amount. No one wants to pay more than they have to!
4. Talk to your customers
Sometimes, people just forget that they’ve got an invoice owing, especially if they’re a busy business owner like yourself, with a lot of other things to do!
And that one invoice you’re waiting on? It might have simply slipped their memory.
If customers are running a tiny bit late, then it’s always worth having a quick chat or sending a message to make sure there are no issues.
It’s also worth sending a quick confirmation email or message when you do send invoices out, so that they know to expect one.
5. Be polite
It really helps to go the extra mile and show some good manners, especially when you’re asking people to hand over money to you!
So be polite and friendly, in all your communications and dealings with clients. Answer their queries on time, and when it comes to sending invoices, do so in a polite way. Don’t act like an intimidating bailiff!
6. Set clear and realistic time frames
It’s surprising how many businesses fail to actually set out a clear timeframe to pay invoices by. This is a sure fire way of making sure you’ve got plenty of late paying clients on your books.
Doesn’t sound very appealing to you? Then set a clear deadline – and list it on your invoice.Don’t hide it amongst the super tiny small print – make it clear so there are no excuses for missing it!
But it should also be realistic. A 7 days, a fortnight or a month is usually a realistic period to expect customers to pay by. And you should also make this clear before doing any work – if clients realise that they are expected to pay within a month, they may need to reconsider whether or not they can afford you, and potentially save you on another late invoice.
Liz Azyan is interested in the ways new kinds of social data and technology introduce challenges and opportunities to society. Get involved with Liz’s latest project here.