Paying bills isn’t always as easy or as straightforward as it sounds. As a business with many different vendors and agencies to pay, it’s important to make sure you pay everyone on time so you can continue to keep your doors open. Using things like accounts payable automation software can ensure you pay your bills, but that’s assuming you have money to pay everyone!
Unfortunately, customers and clients aren’t always so proactive. It is sadly not uncommon for some customers and clients not to pay on time, and if you aren’t careful, they won’t pay at all.
So, how do you make sure you get paid what you’re owed?
Make It Easy
It sounds overly simple, but the easier it is for customers and clients to pay you, the more likely they are to do it. Start by offering as many ways to pay as possible. Payment options to offer include:
- Credit card payments
- Debit card payments
- Mobile payments
- Payment services, like PayPal
There are other ways you can make it easier to pay. If you have a client who receives recurring services, offer automatic recurring payments. You can also allow customers to make online payments through your website. It’s even easier if you don’t require them to create an account in order to do it.
Collect Advanced Payments
If you have a traditional brick and mortar store, it doesn’t make sense to collect advance payments. However, if you offer services that require a lot of time and effort ahead of payday, you should consider collecting advanced payments.
You don’t necessarily have to collect the entire amount upfront. Even a small advanced payment can provide you with peace of mind.
An advanced payment enables you to see which clients are serious about paying and clients who aren’t. It also enables you to get at least some of the total payment, even if the remaining amount were to go unpaid.
Send Invoices Quickly
It sounds obvious, but if you want customers and clients to pay for your products and services, you have to make sure they know it’s time to pay!
Don’t let your bookkeeping get so poor that you’re sending invoices days, weeks, or even months after the fact. It can be confusing to customers and clients who want to understand exactly what they’re paying for. Not to mention, if you don’t appear to be in any hurry to collect a payment, they may think there is no hurry to pay! Send an invoice as soon as services are rendered.
Have a Detailed Follow-Up Procedure
Whether you invoice right away or you wait until the end of the month, you should outline a detailed follow-up procedure for customers and clients who don’t pay on time.
Make sure you follow up on missed payments quickly. That means creating a system that flags late payments and having a standard way to contact those people.
Depending on the type of relationship you have with your customers and clients, you may want to call them directly. You can send follow up invoices, or you can send emails and text messages. If it comes to it, you may want to send an old-fashioned letter.
Be transparent and clear about the consequences of not paying with your customers and clients, which means being willing to turn over delinquent accounts to collections. It also means knowing if you’re willing to accept payment plans when they can’t pay in full on time.
Don’t Offer Credit
Payment plans can encourage a customer or client to pay when they can’t make a lump sum payment, but that doesn’t mean it’s something you should offer to all of your customers and clients. If getting paid on time and in full is important to you, don’t offer credit.
The very nature of credit means allowing someone who doesn’t have the money to buy your product or service anyway. Even if it’s a vendor or a customer you have worked with for a long time, don’t feel bad if you tell them no when they ask for payment options. It helps you streamline your payment process, and it can reduce the number of customers and clients who think they can pay over time, but it turns out they can’t.
If you want to pay your bills on time, you have to make sure you are paid on time! Whether you’re selling products online or you’re providing services to clients in person, these tips will help you collect all the money you’re owed.