What’s the longest you’ve ever waited to get paid on an invoice? Weeks? Months?! Late payments are the number one cause of cash flow problems for small businesses, creating cash flow problems, disrupting business, and even leading to missed opportunities like hiring more staff or purchasing new equipment. But there are ways to combat the problem.
Here are a few tips to help you get paid faster:
- Create a solid contract and make the client sign it. This is one of the most important things you can do to ensure you get paid on time. Your contract should include when payments are due, what happens if a payment is late, and other relevant information. Ensuring they understand the expectations from the start minimizes surprises down the road.
- Request a downpayment upfront. Asking for a deposit shows you’re serious about getting paid and gives you some cash to work with upfront. This can be helpful if you have expenses that need to be paid immediately.
- Don’t put off invoicing. The sooner you invoice, the sooner you’ll get paid. So try to send invoices as soon as the job is complete. Include the payment terms specified in the contract.
- Use accounting software. Accounting software can help you keep track of invoices and payments. This can be a huge help when it comes to getting paid quickly. There are many different accounting software programs, so be sure to choose one that is right for your business.
- Accept multiple payment methods. Some people prefer to pay by check, while others prefer to pay online. Offering multiple payment methods makes it easier for clients to pay you quickly and easily.
- Incentivize upfront and early payments. Offering a discount for upfront or early payment is a great way to encourage clients to pay on time.
- Reassess your relationship with perpetually late-paying clients. If you have a client who is constantly late on payments, it might be time to reassess your relationship. You might want to consider whether or not working with this client is worth the hassle.
Chasing down clients with unpaid invoices makes running a successful business challenging. Implementing these strategies can improve your chances of getting paid on time – every time! Need more advice for keeping your business running smoothly? Turn to the experts at Boris Benic and Associates.