Every business struggles with invoicing and other payment-related issues. And this is especially harder for smaller businesses. When you lack enough resources and manpower for the high demands of your clientele, it can be a lot more challenging to get paid for your services fairly and on time. But in reality, you have more control than you think. Here are five great tips on how to efficiently settle payment terms with your clients, and ultimately get paid faster.
Communicate with your clients clearly
Improve your chances of prompt payment not just by invoicing quickly. Communicate with your clients as clearly as you can, reminding clients what and when they owe you. In fact, the due date is widely known as perhaps the most important payment term of all. If you’re serious about the work you do, and you go out of your way to meet clients’ deadlines, there is no reason why you shouldn’t be paid within a reasonable period of time.
Keep detailed records of inventory and time
Staying on your toes is imperative. This is why the numbers should be at your fingertips whenever you need them. By keeping a running record of every expense, and the time taken to do everything, it is less likely for something to be left out when payment issues arise. Moreover, if costs are going over budget, you can simply let your client know instead of sending them a not so pleasant surprise at the end of the month.
Invoice as soon as possible
The sooner a client receives an invoice, the sooner they will pay. It really is as simple as that. Invoicing within a short time window means that the client will receive the invoice when the value of your work is still fresh in their mind. This will of course lead the client to appreciate your work more, and potentially be more timely with their payments.
Bonus tip: Use a reliable accounting software through which you can create professional recurring invoices. This will surely streamline your invoicing process!
Don’t stop talking to your debtors
Don’t let the wheels jam. Add oil by sending reminders or statements when things are severely overdue. Alternatively, you can opt for direct communication with the client, even if it’s just a question of a simple phone call. Remember: don’t be demanding or threatening, be clear yet firm in your communication, which will show the client you are serious about getting the invoice paid.
Add overdue fees (BUT only if necessary)
If you’ve followed all these steps, and you’ve set your payment terms out clearly on your invoice, but the client has still decided to ignore you, you might want to consider charging interest in the form of overdue fees. But be careful. Only resort to this option if getting paid has become a serious and pending problem. Be prepared for some robust feedback from your clients, so make sure you can reverse the process if you’re sure that the client has learnt their lesson.
Are you in a sticky financial situation with your clients because they are not observing your already-stipulated payment terms? There are 17 Financial Planning Consultants ready to help, all listed on yellow.com.mt.
There’s something for everyone, visit yellow.com.mt