It can be hugely frustrating to have a customer who won’t pay on time, especially if you are relying on the payment. Late payments can cause cash flow problems and a lot of stress, but there are things that you can do to reduce the chances of this happening.
Set Clear Terms
When you issue an invoice, make sure the terms are clear to your clients. Make it clear what the invoice is for, who it is from and how they can pay. This will reduce the chances of someone delaying a payment because they have a question about the invoice, or because they are unsure what they are paying for. It’s also important to set clear terms about how long they have to pay. Clients are less likely to pay invoices without deadlines, so giving a specific date is key. For example, you could say that the invoice must be paid within 15 or 30 days of being issued.
Offer Discounts for Early Payments
One way to get a client to pay an invoice on time is to offer discounts for doing so. You could also add fees for late payments. This means that paying on time, and not paying late, impacts how much a client owes in total. If they want to keep their costs down, they need to pay on time. It’s a way of rewarding individuals who make the effort to pay invoices by the due date, and penalising those who don’t.
Offer Multiple Ways to Pay
When you are chasing an invoice, you want to make it as easy as possible for someone to pay. A lot of clients will pay via bank transfer, but others might prefer to pay via PayPal or credit card. If you offer multiple ways to pay, they are guaranteed to find a payment method that works for them. Clients are more likely to pay on time when it will only take them a minute or two to do so, and it doesn’t require them to set up something new.
Send Friendly Reminders
There are a lot of reasons as to why someone might pay an invoice late, and genuinely forgetting is one of them. If someone has forgotten, give them a nudge by sending a friendly reminder and letting them know that an invoice is outstanding. It’s a quick and easy way to highlight that they are behind on their payments, and it can be done via telephone or email.
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It can be hugely frustrating to have a customer who won’t pay on time, especially if you are relying on the payment. Late payments can cause cash flow problems and a lot of stress, but there are things that you can do to reduce the chances of this happening.
