Do you run a consulting firm? From freelancers to lawyers and online marketing firms for small businesses, dealing with clients is part of the business.
Sure, most clients are likely to pay on time without much effort on your end, but not always. Getting clients to pay on time is essential to your business as inbound cash flow is how you build working capital, market your business and pay employees.
Here are 4 ways you can get your clients to pay on time.
The first step in getting clients to pay on time is making sure you have your paperwork in order. Your contract with the client needs to outline exactly when payment is expected and the process your business takes in collecting.
Hold on to emails, mailers and any other documentation that pertains to your work with the client, billing and payment. Remember to always get things in writing, from who you should bill to what information they need to process invoices.
- Quick tip: Send out emails that summarize in person meetings or phone calls. This is one way to keep track of conversations, reduce miscommunications and ensure both parties are at an understanding.
A confusing invoice could be the downfall of your payment collection process. Make sure your invoices are accurate, easy to read and professional. A “please” and “thank you” goes a long way, but you need to make sure you also include:
- Your contact information such as your name, mailing address, phone number and email address.
- The invoice number and the date it was sent to the client.
- A grid that accurately displays what you are billing the client for. Be as descriptive as needed but keep the main item and amount clearly distinguished.
- The date the payment is due and what forms of payment you accept. Your contract should have a guideline such as “all payments due within a week of the date the invoice is received,” and be clear in payment terms.
While this may depend on the timeframe you have for accepting payments, send clients friendly reminders about their payment due date that allows them enough time to make it without being late.It’s also a way to make sure communication stays constant so that your business, work and invoice aren’t forgotten.
- Example: if you allow payment to be made within 30 days of the client receiving an invoice, send them a quickemail reminder one business week beforehand so they have time to get checks made and mailed.
- If a client does happen to be late making a payment, send a reminder with the existing balance the day after payment was due and then again every 30 days.
Make payments easy for your clients by accepting checks, cash or PayPal. Or, you can get involved with a mobile credit card processing system for your business so that when you’re on the road, you can accept more than cash or check payments.
Accepting credit and multiple forms of payment can help you keep customers and attract new ones.
- Quick tip: Make sure the client has all the information they need to send payments, no matter what channel they’re sending payment through. They’ll need to know how what types of checks can be written, your PayPal payment information, and whether or not you accept cash.
Beyond making sure you work with clients who don’t have reputations of tardy payments or dodging payment all together, you can make things easy on your client to motivate them to pay on time.
In order to get clients to pay on time, you need to have accurate records, invoices and make payment easy for your clients.
Streamline your processes and have templates in place so each invoice, reminder and payment acceptance solution is easy to manage. Get clients to pay on time by sending reminders and making payments easy.
How do you get your clients to pay you on time? Share your tips with us!
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