Top Ways to Get Clients to Pay on Time – Making sure that the cashflow situation at your business is strong and stable is one of the most important aspects of running a successful company. Otherwise, it is all too easy to find yourself in a situation in which you are not able to pay your bills and take care of your staff wages – amongst a whole heap of other commitments that you need to be dealing with. One of the key ways to keep on top of your cashflow situation is by ensuring that all invoices are paid on time. While you cannot always control exactly what your clients are doing, there are some ways that you can help to smooth along the whole process and make it more likely that you will get the on-time payments that you are looking for. Here are just a few of them.
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Ensure Invoices are Delivered in a Timely Manner
First of all, there is the whole process of actually issuing the invoices in the first place. If they are not sent out in a timely manner, you cannot really blame the clients for not paying them on time. If you have a financial department, you need to ensure that they remain on top of this aspect for you. There are a lot more systems that help to eliminate manual workflows and issue out your invoices automatically which could prove to be highly useful. As well as getting the invoices sent out with a clear deadline, you also need to make sure that the payment terms are listed clearly and there are no simple errors with your name, bank account number and so on that could be holding up payment.
Maintain Excellent Client Relationships
A big part of making sure that you get paid on time is the relationship that you build up with your clients in the first place. When you have a positive relationship that you have taken the time and effort to develop, this makes it much more likely that clients are going to be willing to make payments to help you out and ensure that your company continues running in a successful manner. At the same time, you should also remain on top of watching out for the ‘problem’ clients who are always having to be chased up. It could well be the case that you decide that they are more trouble than they are worth to continue working with.
Develop to a Retainer Model
If you are simply invoicing the same or a similar amount each time (rather than providing a different service for the client month by month), it could well be the case that you are able to transfer the client over to a retainer model. This means that the same amount will be charged each month at the same time, clients are less likely to scrutinize every single invoice in detail (which takes time and may have to go through several departments) and are more likely to set it up to go out of their account automatically. Not only this, but your finances will be in a more secure situation as you are able to count on a certain amount coming into your bank account each and every month – making your potential out-goings more predictable.
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Remain Flexible with the Payment Type
You certainly do not want to create a situation in which it is any harder to pay that necessary. Therefore, you should aim to keep your payment types flexible. Essentially, this means not restricting yourself to a single provider or a type of payment method. We live in a world in which financial institutions are evolving at a rapid rate. So, from time to time, you should make sure that you get into the habit of checking out your current payment providers and work out if there are more options you can provide your customers with and if there have been any benefits developed for you.
Follow Up Where Necessary
While nobody really likes getting into the situation of chasing up payments all the time, it is sometimes going to be necessary to give a nudge to the clients who are simply not sending across the money as and when required. This is one of the main reasons why some firms decide that the best course of action is to hire somebody who is able to take care of this for them. If you are having a regular problem with certain clients, it may well be worth questioning whether you would like to keep doing business with them or if it may be the case that they are more trouble than they are worth.
Provide Incentives for Early Payment
While this may not be the type of strategy that you would like to use on a long-term basis, there is no doubt that incentives for early payment can end up being an effective policy that you may well want to put in place. They can certainly help when you are first getting your business off the ground, or you are relying on payments coming in at a certain time on a monthly basis. It could be the case that you give a percentage off the price, or you offer some sort of other free gifts that are desirable to those who would like to send across their cash in a prompt manner.
Consider Late Payment Penalties
If nothing else is proving to be particularly successful, the next potential option that you have at your disposal is to penalize late payments. Of course, if you are going to venture down this particular path, you need to make sure that you are clear and upfront with the terms and conditions that you are setting out. Otherwise, you can end up in a situation in which customers are complaining and you are not legitimately able to chase up the payments.
All of these methods can certainly help out in a big way when it comes to making sure that you get paid on time.
