When you go above and beyond for clients, you expect to get paid just as fast. The biggest disappointment for a freelancer or small business owner when those expectations are not shared by the client when the invoice comes due. Getting your clients to pay you on time is a real hassle. After a sale, it is easy to think you did your job and just relax. Staying silent and just checking the mailbox every day isn’t the best way to handle the situation, but constantly asking may annoy your client. Hiring an outsourced financial controller can also ensure your accounts receivable process is working effectively.
Managing your cash flow properly is essential to your small business success. Clients paying late can mess up your company’s stability. Here are 8 tips to make sure your clients are ready and able to pay onetime
1.Maintain Great Client Relationships
Do you know who will want to pay you on time? A client that feels like more than just a revenue stream. Maintain a friendly relationship with your customers and every so often, let them know they’re valued. Feature them in your content, go out of your way to solve a problem for them, or offer a one-time bonus service to show them that they’re not just another client.
Never forget that people like feeling special, which is why we’re suckers for “exclusive offers,” and why our brains light up when we’re addressed by name.
2. Set Clear Terms in the Contract
Nobody likes surprises, least of all when they’re being asked to part with their money. Your contract should clearly spell out key payment terms: when invoices will be sent, when they’re due, how payment will be made, what your late payment penalties are, etc.
3. Watch for Red Flag Clients
They always give themselves away, even if we decide to overlook the signs in the effort to get a new client signed. They’re overly focused on price, or poorly organized. Or worse, they have a generally unpleasant attitude that’s going to make working with them difficult.
These are the kinds of clients with a high likelihood of not paying on time. Your best strategy is to avoid them if possible. Weigh how well this potential client fits into your agency’s goals against their potential maintenance costs, including late payments. If you decide their potential outweighs the risks, you can use many of the other strategies discussed here to mitigate the challenge.
4. Make It Easy for Clients to Pay You
If the client says they have a preferred payment method use — let them use it. You can negotiate your payment method flexibility as part of your service. There are multiple services that let make it easy for any business to accept ACH, credit card, PayPal, or EFT transfers. Sign up with one so you have that flexibility.
And if their preferred payment method is still by paper check, let them do so — as long as the checks arrive on time. If they don’t, then you can move onto one of these other strategies, such as auto-payments from a credit card.
5. Invoice On Time
It should go without saying, but if you want your clients to pay on time, you need to invoice them on time. The sooner you get them that bill, the sooner they can pay you.
Not only that, but doing so shows you’re punctual. Any form of late correspondence, whether it’s missing a deadline, sending an overdue email, or delivering a late invoice, shows that urgency and timeliness don’t matter to you. If you’re not staying on top of deadlines, why should your clients?
6. Offer Small Incentives for Quick Payment.
Offering incentives for quick payments will speed up the process and build customer loyalty. Customers know they are going to have to pay at some point. If they know that making the payment immediately will give them an additional benefit, then they will often do so.
You can even form these incentives around your product or services. It could be sending company stickers, access to an additional feature, or a free week of service. This will reward them for paying on time and give them further reason to continue coming back.
7. Bill New Clients a Deposit to Get Started
This is more than just a goodwill gesture and hedge against a potential flaky client. It lets you and the client iron out any invoicing or payment wrinkles that might come up early. Getting paid your deposit verifies that all mechanisms are successfully in place for this client to pay you on time.
Often payments are delayed due to administrative snafus. Get all this cleared up during the client onboarding process.
8. Send the Invoice to the Right Person.
At larger companies, it is crucial that you send the invoice to the right person. When your clients are originally agreeing to pay, make sure they know how that payment will take place. It takes two minutes to discuss who will be making the payment, and it will save you significant stress on the back end.
The Bottom Line
There are a variety of small factors that add up to improve the speed in which you receive payments. Think about the time of day that you are sending the invoices out, the styling of the invoices and the actual content within them.
You can streamline the process with a clean and concise invoice. Make it visually appealing and include descriptions of what they are paying for. The process will slow down if you make mistakes. Instead, take the extra time to make sure that everything looks as it should.
Limitless Investment and Capital Outsourced Financial Controller Services in Denver
An outsourced financial controller plays a huge role in creating a policy that will ultimately affect how much cash flow is coming into the business. The controller is expected to create, manage and maintain a credit and collections policy. The collections policy determines how many days a collections representative gives before sending out additional collections letters, past due notices and notices of legal action
Does your small business need assistance in managing cash flow? A Limitless Investment and Capital outsourced financial controller is expected to create, manage and maintain a credit and collections policy.