One of the worst things that can happen to a business owner is having to deal with a client who hasn’t paid their invoice in time. It’s incredibly frustrating, it feels disrespectful, and it’s like they forgot or just don’t care that you’re needing money for the product or service that you provided them. Unfortunately, the harsh reality is that bad clients exist. Thankfully, not every client is a bad client, but there are a few bad apples that you need to be aware of. What’s best is trying to get your customers to pay early rather than late. Sometimes, things come up, or a customer just sincerely doesn’t know how to pay properly. So, here are 4 strategies you should consider applying to get your customers to pay you a little bit earlier.
By Team Savant
Offer Payment Plans
If you’re looking into improving your business website, then this might be a nice option for you. Nowadays, there are so many different programs and plugins that allow for payment plans. Nowadays, payment plans like Afterpay and Klarna are becoming pretty big to the point where some customers are even expecting this. So, if you’re deadset on creating more sales, then this could be the option.
Offer Discounts for Early Payment
While there’s a lot of beauty in invoice wording for immediate payment, sometimes, in order to get that immediate payment, you need to “reward” your customers. This is especially useful for companies that struggle with late payments since it gives them an incentive to pay sooner. By lowering the amount of time between invoicing and receiving payment, you can reduce cash flow gaps and improve your working capital.
However, offering a discount can also cut into your profit margins, so you should weigh the benefits of getting paid faster against the cost of offering a discount. While there’s a lot to think about there, you will at least have a higher guarantee of getting paid earlier than initially planned.
Keep a Regular Schedule
Alright, so this might seem pushy, but you’re running a business, not a charity. Don’t feel embarrassed about being assertive about getting paid. These friendly reminders can actually help with getting paid on time. Getting clients on a scheduled invoicing system can help them understand when they need to pay and how much they owe. It’s important to be upfront about this so that you can avoid confusion and conflicting expectations.
Charge Late Fees
While it’s not ideal and seems hostile, it’s so important to stand your ground. All businesses need to do this, no matter how big or small your business is. If your clients don’t pay you promptly, it can hurt your business’s cash flow. So, don’t feel bad about putting a late fee on there or even charging interest; you have the right to do it. There may also be legal restrictions on how much a business can charge for late fees, so check with your local laws and regulations before you decide to implement such a policy. Overall, stand your ground, be consistent, you worked hard, and you deserve to get paid.