Running a small business can be a challenge in itself, but that challenge can be further punctuated by late payments. Getting your clients to pay you on time can be extremely difficult to do. After making a sale, you’d expect to sit back and enjoy your success, but nothing is final until the payment has been made. In more ways than one, such instances can be elusive.
While the business landscape compels you to wait, late payments can eventually cause your company to plummet. A punctured cash flow can be detrimental to your operations, especially if your business operations currently rely on such money for a certain timeframe.
Such circumstances also lead you to attract less than ideal customers, which is a far cry from your goal of working with recurring and valuable customers. To make sure that your clients pay on time, or if you’re looking for better ways to urge them to pay their debts, here are some tips to consider:
Tip #1: Set your payment expectations as early as possible
Before agreeing to any form of deal, you must let your clients know that you’re running on a specific cost and payment schedule. It’s vital that you don’t give them any reason to play the confusion card or any excuse to not pay on time, as this will only set your operations back. Make sure to communicate from the onset that they need to pay a certain amount on time, which will properly set expectations.
You must also invest in sending out gentle reminders for upcoming payments, just to make sure that you remain consistent with the communication aspect of your business. You’ll need to carefully put the pieces in place, ensuring that they remain aware of how much they owe, and when they’re expected to pay. In the realm of finance, good communication is key!
Tip #2: Keep following up
Once you’ve successfully sent out the invoice, never hesitate to follow up. Expect your clients to be as busy, so most of them will likely have overlooked payments. That said, make sure to keep offering friendly reminders, just to ensure that they’ve received the message. In case of any trouble, you’ll have proof that you’ve done your part. Keeping them reminded also demonstrates your professionalism, letting them know that you take your business seriously.
If you can, invest in methods of streamlining your processes. Invoicing & payments software are readily available for accounting use, which prompts you to collect payments without the hassle. When it comes to your business goals, investing in the right platforms is always the right choice—you’ll be reaping the benefits, and in this case, dodging the need to deal with difficult clients.
Tip #3: Offer your clients small incentives
If you’re looking to eliminate the chances of incurred client debt altogether, consider investing in incentives. You can offer such small prizes for quick payments, such as small discounts or gift vouchers. This can also help build brand recognition and loyalty, especially since customers enjoy additional benefits.
The more beneficial for them, the better. The reward for paying on time will help you stay on track, and at the same time, encourage them to come back for repeat business. Not only will you keep your resources intact, but you also further your business goals.
Proactiveness is Key
Regardless if you’re trying to collect client debt or wish to ensure that you don’t fall into the situation, the best way to do so is to remain proactive. By placing policies and procedures in place, you reduce delinquent clients, most of which can be detrimental to your small business. Make sure to have payment policies in place and set expectations. Don’t hesitate to follow up and above all, keep your customers happy by offering additional benefits. Such efforts go a long way, especially when it comes to ensuring a healthy financial status.
For better client debt management, My Firm 360’s invoicing & payments software is the investment for you. We offer you a secure payment system, specifically designed to help improve your cash flow. It eliminates the need for costly and time-consuming checks, contracts, and paper bills, which ensures total convenience for both parties. With such streamlined processes, you never have to worry about client debt—book a demo today!