It can be frustrating when your customers aren’t paying you on time and a hassle when it comes to chasing them up to make payments. Late payments can have a knock-on effect on your business and cause further cash flow issues. As a small business owner, your time is precious, therefore, the last thing you need is to be waiting on payments to come through. Fortunately, there are some things you can do to make the process easier.
Invoices.
Invoices are essential for any business transaction. When you send an invoice, you are providing your customer with all the information about the payment. Therefore they have everything they need to pay you, preventing any time consuming back and forth emails about payment. It’s also a good idea to give your customer a payment deadline on the invoice too, setting up a deadline will add urgency and encourage your customer to pay quicker.
Direct Debits.
If you work with a customer regularly, then you should consider setting up a direct debit with them. The money will automatically be paid into your account on the same day every month, completely removing the need to chase up customers for payments. This can save you and your customer a lot of time and allow you to focus on other things. However, this will only be effective if your customer pays regularly and the same amount each time.
Automatic invoice reminders.
Setting up automatic invoice reminders are a great way to remind your clients about payments without too much pressure. An automatic reminder will help to save you time and the awkwardness for both you and your customer when it comes to chasing up a payment. Most accounting software now has the feature to send out reminders to your customers.
Overdue invoices.
If a customer has missed their payment deadline, a great way to approach, as a first step, is by sending out an overdue invoice. Most likely, your customer has forgotten and just needs a reminder that they haven’t paid yet. An overdue invoice will include the same information as the original invoice, as well as a reminder that their payment is overdue, how late the payment is and what the next steps are if they still don’t make the payment.
Here are some great examples of overdue, due and very late invoice reminders.
Give them a call.
This is a simple but very effective way to get paid. Speaking directly to your customer is a quick solution to your issue and means that there is no room for excuses of lost emails or miscommunication. However, this can take time out of your busy day and you may even find it awkward to make the call, therefore a phone call may only be necessary when a payment is late.
Ask for a deposit or up-front payment.
You may want to ask your customers to pay upfront for your services, or if you don’t want to ask for the full amount, a deposit. This is an effective way to confirm and receive all payments before you even start working and guarantees your money, taking away the stress of not being paid.
Want to know more about setting up invoices and managing the financial side of your business? Get in touch with Vicky today.
