We understand how frustrating it is not to get paid on time! After all, cash flow is the lifeblood of any business. But don’t worry, we’re here to help.
You’re just one of many if you are having difficulty getting your invoices paid on time. The cash flow is essential to any business – it must be monitored as money comes in and goes out. If your cash flow is unstable, it could jeopardize the future of your business. One frequent cause of weak cash flow is customers paying late.
You can take preventative measures to make sure you get paid on time so that difficulties don’t come up in the first place. If you’re running a small business, getting paid quickly is vital. Read on for our 5 tips on how to ensure you always get paid promptly!
1. Be Selective With your Clients
If you want to save yourself some grief, take the time to research your potential clients. You don’t want to end up working with someone who has a history of not honoring their financial obligations, no matter what payment plan you offer them. Save yourself the headache by doing your research before you start working for a new client. Here’s what you can do:
- Use the Companies Register to look up information about the company
- When taking on a new client, always ask for references from previous projects. This allows you to confirm their payment track record and vet them accordingly
2. Sign a Binding Contract
Create a legally binding contract to prevent any future disputes or non-payment from your client. This will save you time, money, and energy in the long run. This acts as an agreement between you and your client that is legally binding. The following should be included in your contract:
- Your name or company
- Work that you will be responsible for
- Amount both parties agree to
- Duration time to complete the project
- Outline the responsibilities between you and your client
- Right to go to court if you or your client break the terms of the contract
3. Enable your Clients to Quickly and Easily Pay
To ensure your invoices get paid promptly, give your clients as many paying options as possible. Some will want to use cheques or bank transfers, others may prefer credit cards or digital wallets like PayPal. Consequently, offering various modes of payment, allows your clients to pay you in a timely manner.
4. Establish a Regular Follow-Up Schedule
You have put in the hours, now it is time to get paid. If your client is lagging on their payments, take charge and remind them gently of their outstanding balance. Not only can you set up automatic follow-up emails with invoicing software, but you can also monitor your payment progress.
If you start by sending an email, then continue to follow up with more emails but still don’t get a response, consider escalating the situation by going to their office in person or giving them a call. If you find yourself in this situation, be insistent on being paid what you are owed. If required, bring the issue to those at the top of the hierarchy and make sure executive leadership is included in the loop. If you have to pursue legal matters to seek your payment, your calls and emails chasing payments can serve as documentation.
5. Automating your Invoices, Reminders and Follow-Ups
One of the most stressful aspects of being your own boss is managing your cash flow. This is difficult when clients don’t pay you promptly. However, these issues can be a thing of the past with cloud-based solutions like Xero invoicing. With Xero, you can forget about manually sending your invoices. Automate your invoicing process to get paid faster by setting up an invoice template, saving customer details, and quickly sending invoices to customers easily with the help of FastLane. To know more about Xero invoicing updates this year, explore our article: What’s new about Xero invoicing updates in Nov 2022?
Automated invoicing systems can also help businesses secure payments from clients who habitually pay late. Furthermore, these solutions are designed to streamline the billing process. Not only do they save you time, but talking to your customers becomes easier and more consistent. You’ll also get notifications if a payment is missed or running late. You can also set a reminder email or phone call to alert your clients about their payment status. This way, you are consistently providing them with updates and maintaining good communication.
Key Takeaway
Late payments are often more than a minor annoyance; for some businesses, not receiving payment on time can have harmful effects. Fortunately, by establishing the correct procedures and partnering with the right people, like FastLane, you can decrease the times of late payments and get your money sooner. Discover how FastLane can make it easier for your business to get paid. Contact us today to learn more!