Do you feel as though it doesn’t matter what you do, you just can’t seem to get your customers to pay on time? If this is the case, then the first thing you need to know is that you are not alone. So many people are in the same situation as you are, but if you follow this guide, you should be able to make your life a little bit easier, without losing customers along the way.
Build Strong Relationships
One of the first things you need to do is try to take the time to build strong relationships. Treating your clients well, will make them way less likely to ruin the relationship they have with you by paying late. The main reason for this is that it’s not actually in their best interests either. If you have customers who are happy and loyal, then they won’t want you to be disappointed in them, so use this to your advantage. Make sure that you set regular payment deadlines, and that you also take note of your customer’s situation, before agreeing to any kind of credit agreement. You also need to make sure that you are setting clear payment terms. Always provide your clients with upfront payment terms and set a policy as to what happens if they were to pay late. If you can do this, then you can make sure that you have everything in order. This information should, of course, be freely accessible on your site, and it should also take note of any contracts you offer, as this may change the payment terms.
Making things as simple as possible is the best thing you can do, as it means you can help your customers to feel invested in your success, and you can also avoid missing payment deadlines, which is great to say the least.
Invoice Quickly
Another good thing to do is try to invoice quickly. If you are concerned about encouraging people to pay, then the best thing you can do is invoice quickly. You need to remember that your clients won’t even think about paying you if they don’t feel as though it’s an urgent matter. If you can make them believe that it is, then this will work to your advantage. Don’t wait until the start of the billing month or even the end of the billing cycle to send the invoice over. Multiple reminders will cost you a lot of money and time. On top of this, if you can automate your process, you will find things a lot easier. If you can also make it easier for your clients to pay, this will again help a lot. It may be that you offer multiple ways to pay, and that you also make sure that you use whatever method is best for them. As you begin to roll out your process, and as you encourage customers to pay online, you will see that people adapt and that your payments end up coming through with way less stress.
Recurring Payments
If you know that your site accepts recurring payments, then you can also use automatic invoicing to your advantage. If you want to find out more about how to make your process efficient, it’s worth reading this guide to recurring payments. Of course, chasing your customers every month for payments they are not making is not efficient, so you need to make sure that you are mindful of this and that you find ways to automate the process so you don’t have to chase or continually send over your payment details. Invoicing software will usually come with the option to do this, so don’t overlook that. If you want to make things easier for yourself, then implementing rewards or incentives for paying early will help too. Even a small bonus for paying early and encouraging your client to move your invoice to the top of their stack will help. You will probably get better results if you do, and you may also find that you can avoid having to email them all the time. A small discount may lose your company money, but at the end of the day, it will stop you from having to worry as much about losing time, energy, and money chasing people all the time.
Late Payments
Dealing with late payments is so important. Many small business owners are concerned about the impact of charging for late payments, as they worry about losing customers. Although this is a valid concern, it’s more important to focus on the customers that you will gain as a result of having a solid payment policy. The people who are avoiding your company because you have a late payment system in place are not the customers you want to be dealing with anyway, and you’d probably be better off without them. On top of this, having a reliable payment system will make you look more appealing to customers who genuinely want to work with reputable business owners. If you want to implement a late payment system, then you may look into a variety of models, including a flat late payment fee, as well as an interest charge. The option you go with will largely depend on what you are looking for and what you sell, but at the end of the day, it’s worth looking into.
Keep in Touch
You should remember that just because someone pays late, that doesn’t mean that they mean to. Sometimes people have a lot going on, and other times, there are financial issues at play. Getting angry doesn’t do anything, but keeping in touch is often the best way for you to try and make sure that you are not missing out on critical information that can help you to make decisions. Check in with people, take the time to understand their situation, and then act accordingly when things don’t quite work out as they should. Your customers will respect you more for it, too, so be sure to keep that in mind.
