Many businesses across the globe struggle to get paid on time. According to a study, nearly 82% of all small businesses fail because of improper cash management. This is usually because of delayed invoices that aren’t completed and sent out in time to initiate payment.
Here are a few ways you can make sure your invoices get paid on time.
Before you sign off on a project, you should establish clear due dates that can’t be exceeded under any circumstances. This is a two-way street, so you should always deliver on time to expect the same in return. If the project is due in 30 days, then the payment should be negotiated so that you get paid on time right after the project is due.
When setting the date, make sure that both parties have agreed to it and that the late fees and penalties are also agreed to without exception. This is business; there is no room for leniency.
Find the Right Point of Contact
You need to find the right point of contact for a client so you can deal with someone who doesn’t become a hurdle for you. Hence, you should establish contact with someone adept at accounting. If your client is the only one that you can talk to, then you should make the most of it; but if you have the option of conversing with someone who has the accounting know-how to help you get paid on time, don’t let that option go. It could be the difference between your business’s success and failure.
Utilize a Digital Solution
Since we’re moving into the digital economy, it’s a good idea to modernize archaic systems so that online payment solutions and deadline-based payments are always delivered on time. These platforms will allow you to send, receive, and track payments seamlessly. Many of the top payment companies also offer mobile payment solutions so you won’t have to leave your finances unattended.
If you’re looking for the right platform, then you should take a look at your accounting needs so that you can choose a product which can scale up to the level of your business. Choosing inadequate products can sometimes cost you more than late payments. A few of my favorites are WaveApp, PayPal, Quickbooks, and Stripe.
A few things that you should look into for digital solutions include:
Online Invoicing Multiple
This is the one thing that should be at the top of the list. If the end goal is a platform that sends and tracks invoices altogether, then you should look for one which accepts deposits, sends recurring invoices, and maintains records.
If you want to get paid on time, you should give them as many options as possible so that they have no excuse to avoid the payment. They should be able to pay with eChecks, ACH, credit and debit cards, and even CashApp if possible.
Make sure that the company you’re working with offers different types of payment solutions that are compatible with you and your clients. For instance, they should offer peer-to-peer payment services like PayPal and Alipay as well as banking services like VISA and MasterCard. Mobile credit card scanners are also great for small businesses.
Encourage Recurring Payments
If it is applicable, you should push your client to automate the payment procedure completely. This makes sure that you don’t have to wait for lengthy procedures to be completed so you can get paid on time. That being said, you should make sure that you choose an invoicing solution which offers functionality that supports repeat payments. If your client opts for a payment schedule, then you’ll never have to worry about late payments again, mostly because it won’t be dependent on the client to manually deposit money or give the go-ahead once the deadline has been met and the final product delivered.
Investing in virtual assistants can help cut down overhead costs. These virtual assistants will help you speed up workflow and make sure that important documents aren’t stuck in transit so that you get paid on time.
Request an Advanced Deposit Before You Start Work
In order to avoid late payments or being at the mercy of late payments, you should build a strong relationship with your clients so that you can request payment upfront before you begin working on the project. There are a lot of small business owners who are timid when it comes to asking for deposits, but this is one way to keep your cash reserves afloat.
After you’ve proven your worth and reliability to your client, you can easily demand payment upfront. If you deliver on time after you’ve made this request, then you will build further trust with the client and, hence, the client will feel more comfortable advancing you the money in future projects as well.
Once your client opts in for the initial deposit, they probably won’t miss the second payment as you will have the power to withhold the product or the service until the full payment is received.
Remember that late invoices are the reason that nearly all businesses fail and very few succeed. So take this seriously. Make sure you follow these five tips, and you should be fine.
Have I missed anything? Share some of your tips to getting paid on time in the comments below.