Did you know that on average, 50% of small business invoices are paid late? It doesn’t always have to be that way though. It is possible for you to half the time you get paid, or even get paid on time altogether. It all comes down to the way that you send your invoices and the way that you deal with your customers.
Invoice Them Right Away
Your client cannot pay you until you send them an invoice. So when the time does come for you to invoice them, make sure that you do it right away. Clients are much more open to paying a bill when they have received their goods or even their services. There is no reason to delay in sending your invoice to them and there is no reason for them to delay paying either. You can even send invoices from your phone if this is easier, and if you are sick of getting paid late altogether then cashflow finance could be a good option for you.
The next thing that you’ll want to do is make sure that your invoice has all of the information required. This even includes a detailed description of any work that you have done or even the product that you have provided. You should note the date the service or product was delivered, plus any client requirements that may have been present as well. This could include the order number. Some clients may have specific needs when it comes to invoicing, so it helps to have all of these details written down so that you can give them the invoice in the format they need it in. If your clients are always coming back to you because the invoice is wrong or even because it is not in the format that they need it in then you can’t expect to get paid on time. It also helps to make sure that you put the due date on the invoice as well, as this will really help you to chase up any late payments with evidence of when it was due.
Clients are probably used to having weeks to pay any invoices that they owe. A third of businesses now request any payments to be made within the week. Consider doing this. It is possible that your client will want to negotiate so that they can have more time and it helps to be flexible with this. If you do start out with 7 days, this will help you to have a good expectation of when the payment will be made and if more time is required.
Fees for Late Payments
Some businesses charge a fee if a client pays late. If you want to take up this policy then it is incredibly important that you make sure that it is clear when you send the invoice. You can include a note or you can even send them a message in the email. It helps to have a late fee when the invoice surpasses the due date but it also helps to have a percentage fee as well. This can be charged every month it is late, so your client can’t get away with paying the late fee and not the actual invoice. The lure of saving any kind of money is a very powerful motivator when it comes to your clients, even if it is a very small 5% discount. For this reason, you should offer this to clients who do pay on time as a reward or even as a thank you.
Make it Easy to Pay
Customers will pay you much faster if you make it easy for them to pay. You need to make sure that you give them the option to pay in their preferred method. This could be in a variety of options, such as a credit card or even an online payment system such as PayPal. This is a great way for you to accommodate to all of your customer needs.
When you send an online invoice, you’ll quickly see that it comes with a lot of useful features. This can include seeing when the invoice was opened, when it was sent, when it was paid and how late it is. It helps for the client to see this information as well, so this puts additional pressure on them when it comes to getting paid. This can make a world of difference to your existing cash flow as well.