Most clients will do all sorts of things to make sure that their clients pay on time. Yet, despite all of this, they still have lots of unpaid invoices waiting for them to follow up.
This is quite irritating, and it is good to know what you can do.
Here are a few ways you can use to encourage your clients to abide to the payment terms:
Allow them to pay in instalments
You could allow the clients to pay in installments of milestones. In this case, you receive payment after each stage of the project, at which point you move on to the next stage. Without paying for the first stage, then the project does not proceed.
Customers are therefore more likely to pay and be on time throughout the lifespan of the project.
In the invoicing world, NET is another word for full payment, and most customers will insist on either net 30 or Net 60; this is way too long for any business to accept, and condensing the timeframe and requiring them to pay after a project is completed, or goods are delivered will help you get paid faster.
You may consider asking for a deposit before the project kicks off. This will cause the client to complete the payment early, in order to have their projects done on time.
Come up with a late payment fee
Some customers are simply geared towards paying late, and regardless of how attractive your on-time incentives are, they will never send the money when it’s supposed to.
In this case, you have to be strict, and the best way to go about this is through threatening them with charges and late payment fees for late payments.
This practice is allowed by the law, and you can charge them additional costs of about 1.5-2% of the total invoice amount that remains unpaid. You should, however, not just say it; you must implement it whenever they are late with payments.
Keep updated on your invoices
This means that you should monitor and track all invoices to identify the customers who haven’t paid. This can either be done manually, or you could automate the process and put up alarms when due dates come around.
There are plenty of web-based systems such as accounting software that can be used for this purpose. Regularly reminding clients of payments, they should make could be the push they need to make the payment.
Keep in touch with your clients
For the business relationship to work, talking with your customers constantly is necessary. This helps build respect and trust, plus you can know where they are when it comes to paying the Invoice.
When you have this strong connection, you are likely to have clients who will pay promptly and without any arguments to retain the relationship.
Give them Incentives
Offer your clients incentives for early and prompt payments, such as offering them discounts. This is great for them as it will save them some money.
Additionally, it helps you because you will have cash at hand and keep your books accurate.
Accept different payment methods
This gives your clients options and ensures that you accommodate everyone and their needs. This is a great way of encouraging them to pay on time and quicker as they do not have to start adopting new ways of payments, which may discourage them.
Make it easy for your clients to order and pay
Adopt a system of ordering and paying for goods and services that is easy on your customers. There are many dedicated ordering platforms that you can use from a single dashboard, and these will keep track of all the clients and their orders plus payments.
People love easy things, and this is a fantastic way of making life easy for the customers.