Payment is one of the most important aspects of business, but it can also be one of the most frustrating. Whether you're a small-scale entrepreneur or a large corporation with numerous clients, getting paid on time is a crucial part of doing business. However, there are steps that you can take to improve your chances of getting payments in full and on time. Let's cover some strategies for making sure that your invoices get paid quickly and easily:
Set clear payment terms
- Set clear payment terms. It's important to set payment terms that are fair to both parties and clearly stated in advance. A good rule of thumb is that if you wouldn't be happy with a client paying you later than they promised, then don't expect them to be happy with paying sooner than promised either!
- Include a late payment fee if applicable. If there's no room for flexibility in your payment terms, consider including a late fee for those who miss their due dates, that way you'll still get paid eventually but it won't cost as much in interest or administrative costs associated with collecting unpaid invoices.
Set up online invoices
Online invoices are easier to send and track, as they can be sent directly to your clients. They're also more convenient than paper invoices because you don't have to print or mail them out, which saves time and money on postage costs. Plus, when you set up an online invoice system like Freshbooks or Wave (which we use at our agency), it allows clients access to their own account where they can see their outstanding payments in real time! This means if a client owes you money but hasn't paid yet, they'll know immediately when they log into their account, and won't be able to claim ignorance later on down the line!
Invoice promptly: Send invoices as soon as work is completed
The sooner you send an invoice, the faster your client will pay it. That's because most invoices are paid within 30 days of being issued. The longer you wait, the less likely they are to pay on time.
If you don't have an automated system in place for sending invoices (which is why we built one), then get started by sending out one invoice per week at a minimum, and try not to wait until the end of month or quarter either!
Use professional invoice templates
- Templates are a great way to save time and money.
- You can make your own templates, or find them online.
- Customise the template to suit your business needs and style.
- Use professional-looking invoice templates to create a more professional appearance for invoices that leave an impression on clients, suppliers, and other stakeholders in your business
Offer multiple payment options
You can also offer clients a variety of payment options. If they don't have the cash on hand, allow them to pay by credit card or check, and don't forget about invoice payments. The more options you give your customers, the faster they'll be able to get their invoices paid off!
You should also consider offering online invoicing software like Freshbooks. This will help streamline the process and make it easier for clients to pay through an app instead of having to mail in checks or write down their account number every time they want something done by someone else (like an accountant). Finally, consider setting up automatic payments so that each month there will be less work involved in getting paid because everything has already been taken care of beforehand!
Create auto-pay procedures
- Create auto-pay procedures.
- Make it easy for customers to pay online and save yourself the hassle of chasing down payments. If you have an ecommerce site, make sure there's a simple way for customers to enter their credit card information and pay right away. If you have an offline business, consider partnering with a payment processor like PayPal or Stripe that can handle all of your transactions automatically without any extra work from you (and even provide customer support).
- Use reminders when necessary: If some clients are consistently late paying invoices, set up reminders so they remember when they're due, this will help prevent late payments in the future!
Use automatic reminders and follow-ups
- Send automated reminders. Setting up automatic reminders is a great way to get paid faster and ensure that you don't forget about invoices in your inbox. For example, you can use email or text messages as reminders, or schedule them using a calendar tool like Google Calendar or Microsoft Outlook.
- Use tracking systems for follow-up calls and emails. Tracking systems like HubSpot's SalesIQ allow you to see if someone opened an email message or clicked through any links in it (like the link in an invoice template). This information helps you know whether they saw what you sent them, and whether they were interested enough in it that they'll respond when contacted again later on down the line!
Turn late payments into a learning experience
Invoicing is a process that can be made easier by taking the time to learn from each late payment. By keeping track of what you are learning, you can use this information to improve your business and customer service.
- Keep track of what you learn from each late payment: You may find that one type of client consistently pays late, but another type always pays on time. Or maybe there is something about the way you invoice that causes clients to delay paying their invoices even though they have no real problem with them (e.g., "I just wasn't ready yet"). If so, this would be an opportunity for improvement - maybe an invoice template could be tweaked slightly so it doesn't look as intimidating or require more work than necessary from clients who don't understand exactly how much time goes into producing each product or service offered by your company; maybe there needs to be some sort of follow-up process put in place after sending out invoices so people know exactly when they're due back within certain parameters (elements such as whether someone has agreed beforehand how long certain aspects should take).
If you want faster payments from your clients, there are some steps you can take to help speed up the process
If you want faster payments from your clients, there are some steps you can take to help speed up the process.
- Make it clear what payment terms are. While it's tempting to think that everyone knows how much they need to pay and when, there may be some confusion on both sides of the transaction if they don't know exactly what is expected of them. Be sure to spell out all terms in your contracts and invoices so that no one has any doubts about what they're supposed to do with their money after receiving an invoice.
- Send invoices as soon as work is completed. This will keep things moving along smoothly and prevent any delays in getting paid (or worse yet... late payment penalties!).
- Offer multiple payment options so that clients have more flexibility in making payments; this could include cash, check or credit card via PayPal or Stripe Connect (which provides internet-based processing). You can also consider adding automatic reminders once an invoice has been unpaid for a certain amount of time, this will help ensure timely payment without having too much back-and-forth communication between parties involved!
One specialised approach, particularly relevant for businesses dealing with government contracts, is government contract factoring.
Government contract factoring involves leveraging your government invoices to access immediate cash flow. Instead of waiting for the extended payment cycles often associated with government contracts, you can sell your accounts receivable to a factoring company. In return, you receive a significant portion of the invoice amount upfront, allowing you to meet operational expenses and invest in your business without delay.
What are great payment options when doing business online?
You can accept credit card payments, bank transfers and checks. You can also use PayPal, Bitcoin or cash. PayPal is a popular option because it's easy to set up and use. It's also free to sign up for an account, you don't need any special equipment or software to accept payment via PayPal; all you need is access to the internet!
If you want an alternative way to receive money from clients who don't have credit cards (or don't want their details stored), Bitcoin could be a good choice for you. The process of buying bitcoin involves finding an exchange platform where people buy and sell cryptocurrencies like bitcoin in exchange for real currencies such as USD/GBP/EURO etc., then transferring those funds into your wallet which will give you access via QR code scanning at checkout time without any additional fees being added onto your invoice amount before it gets paid out automatically once approved by both parties involved through email addresses linked together with each transaction being logged onto blockchain ledger system keeping track every single detail about every single transaction ever made using this method so there's no chance whatsoever anyone could steal money away from either party involved without getting caught eventually which happens rarely anyways due.
FAQs on getting outstanding invoices paid
Dealing with outstanding invoices can be challenging for small business owners and freelancers. To help you navigate this often-complex process, we've compiled a Frequently Asked Questions (FAQs) section that addresses common concerns and uncertainties.
By providing clear, practical answers to these FAQs, we aim to empower you with the knowledge and strategies needed to tackle overdue invoices, improve cash flow, and ensure the financial health of your business.
What are some good ideas for incentivising early payments?
- Offer a discount for early payment. If you have the ability to offer your clients a small discount for paying early, it's worth considering. This can be especially effective if you've been having trouble getting paid on time or at all and want to incentivise them for quick payment.
- Offer an incentive for paying early. Another option is offering an incentive such as a gift card or other reward when they pay before the due date of their invoice(s). You may also want to consider offering this type of incentive only if they pay within X days/weeks/months after sending out invoices, which will help ensure that only those who really need it receive it!
- Make sure your payment terms are clear! Most businesses use invoices as reminders about what needs doing next but rarely think about how those reminders are perceived by others until after something goes wrong; in fact, most people don't even realise how much attention should be paid towards communicating effectively with clients until they've already made mistakes along these lines themselves!
What are the best online invoicing and accounting tools?
The best invoicing and accounting tools are those that make your life easier. And while they all have their own unique features, there are some commonalities among them:
- They're easy to use. You should be able to get started right away without having to read through lengthy manuals or training videos.
- They allow you to send invoices via email, as well as set up recurring payments so that clients automatically pay their bills on time (or at least within a certain amount of time).
- They allow you to connect with other apps like payroll and accounting software without having to switch back and forth between different programs for each function, you'll just need one place where everything is centralised into one dashboard!
What's an example of a good follow up process?
There are many different ways to follow up with your clients, but the most effective ones generally involve:
- A phone call or text message
- An email
- A social media post (such as on Facebook)
Another good option is to send a gift in the mail. For example, if you're selling cookies or cupcakes, include one of those in your package along with an invoice. You could also send flowers or candy, anything that will remind them of your business and encourage them to pay up!
Conclusion
In conclusion, managing outstanding invoices and ensuring timely payments is crucial for the financial stability of small businesses and freelancers. By implementing the strategies and tips discussed in this article, you can create a more efficient invoicing process, strengthen client relationships, and improve your cash flow.
Remember, staying proactive and maintaining clear communication with your clients is key to minimising overdue payments and fostering a successful business. Keep exploring, adapting, and refining your approach to achieve the best results and secure a bright financial future for your business.
