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 7 days.
Make Paying Early an Attractive Option
People love saving money and the lure of a 3% discount will prompt some of your clients to pay by the earlier date.
Penalize Late Payment
It’s also important to impose a late payment fee and to make this clear within your contract & invoice.
Issue Your Invoices as Fast as Possible
Issue an invoice as soon as practically possible. 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.
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 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.
Ensure Your Invoices Have All Necessary Information
Reduce payment delay by ensuring your invoices include a clear description of the work, date it was provided, client information such as a purchase order number & contact person, due date, and exact instructions about how they can pay.
Use Accounting Software to Streamline the Whole Process
Accounting software such as Quickbooks or Xero make it easy for you to create an invoice online, send your client a secure link to it, & for the client to easily make payment from the invoice itself.
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.
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.
Infographic source: Invoices