Chasing late payments? Losing time and money over getting your payments on time? This situation is really nasty and Frustrating especially for freelancers and small business owners. Here are some practical tips that we implemented over the period of time, might help you to avoid late payments and get paid on time.
1. Up to date customer data : First thing you should do is to keep your customer data up to date. Confirm your customer’s current postal addresses, contact number, email address etc. and keep updating it time to time. Use a good invoicing software to keep track of your customer payment data like total invoice, pending invoices, due dates, overdue payments and much more.
2. Invoice immediately: There’s no perfect day or time to send the invoice. As soon as work is complete, send the invoice immediately. As the project is still fresh on your clients’ mind, chances are high that you will receive payment on time.
3. Confirm when necessary: Give a call to your client to confirm the receipt of invoice. Sometimes clients can miss the email. Calling can also be a good way to establish and maintain a personal connection with your client.
4. Set clear payment terms: Mention your Payment Terms and late fees clearly on the estimate and on the invoice. Ensure client read it, understand it and accept it. Adding a discount for early payment can be a good idea. For example, if the payment is due in 30 days, offer a discount of say 5% for the full amount that is paid within 20 days.
5. Stick to the schedule: When the payments are overdue, send reminder but not to sound pushy or appear that you are behind your client. Best way is to set pattern and send automated payment reminders.
6. Don’t hurt your business: Be it a friend or old client, do not be lenient when it comes to the payment terms. Deliver on time get paid on time is a fair deal. If you don't follow this, then you're hurting your business.
7. Polite yet professional: Ensure all your communications are professional. Use ‘Please’ and ‘Thank You’ in all your communications.
8. Be flexible: Accept all modes of payment – cash, cheques or online payments. Some customers are finicky while making payments; give them all the options available. Freelancers and business owners who use the payment gateways supported by ShimBi MyBilling claim that accepting online payment is quick and painless.
Start accepting online payments.
9. Advance payments to reduce heartburn: Whenever possible, ask for an advance payment. Especially startups shouldn't hesitate to ask for some amount upfront. This will help to reduce some burden on you.
10. Do you Know a lawyer?… Just in case
It wouldn’t hurt to get a legal opinion on customers who turn defaulters.
In Summary: Following up with your customers in a scheduled and in a process-driven manner will ensure the smooth cash flow.
Comments and experience we love to hear ….