Clients Won’t Pay On Time? These Tips Can Help

As a business, you need to pay others and get paid promptly. This is not just a matter of courtesy but a crucial aspect of maintaining a healthy cash flow. Sadly, the two aren’t always in sync, and you can be the best payer to your vendors only to find that your own clients are not giving you the same respect. The urgency and necessity of timely payments cannot be overstated.

Many businesses have to deal with late and assigned payments, which can massively interrupt cash flow and put you in some tricky situations, especially if you’re relying on being paid at a certain time.

But what can you do to improve payment rates and encourage people to be prompt payers who support what you do and keep your company moving?

Offer Discounts

Offering small discounts for prompt payers or those who settled upfront can be a great way to entice people to address their invoices for you faster. If you offer a 5% discount for payment within 5 days or even 10 instead of a standard 30 days, this might encourage people to take advantage of the offer and settle up.

While offering discounts can be an effective strategy, it’s important to consider the potential risks. You can offer discounts for block payments settled upfront or offer incentives such as add-on services. But the more appealing it is to pay sooner, the more likely people will be to do so. However, be mindful of the potential impact on your profit margins and the perception of your product or service’s value.

Make It Easier

Ease of payment is paramount when it comes to facilitating on-time payments. If you make it easier for your clients, they’ll have barriers removed to help them settle up earlier than usual. If you have a merchant account for small business, which is a type of bank account that allows businesses to accept payments in multiple ways, for example, you can use payanywhere POS to have payment methods on your person so people can pay there and then. This is great for contractors and services such as plumbing or electricians who might attend emergencies. Having a POS on your person can mean people pay faster than having to find cash or wait for online payments or phone payments to be made.

Set Clear Terms

One way to discourage poor payers is to have a clear set of terms and conditions to which your clients need to adhere. This details your payment policy, when you will send invoices, when you expect them to be paid, how to pay, and what late penalties you have. The more options they have, the easier it will be to get them to part with their money. This way, they will know what to expect should they fail to meet your terms, allowing you to move forward with further actions and giving you a sense of security and control over your cash flow.

Electronic Invoicing

One important factor in improving payment times is how fast you get the invoice sent out. Electronic or automatic invoicing means you can issue your invoices instantly or even ahead of time if the client prefers, allowing them more time to settle up and make accommodations for paying you. Integrating an electronic payment option to your invoice and having them all collated in the same place to allow you to track invoices and payments means you can speed up the process and keep a more accurate record, allowing you to identify issues sooner rather than later. This efficient and organized approach can make you feel in control of your financial operations.