Unpaid invoices are the bane of any organization’s accounts receivable department. After all, why should your business have to take on the burden of following up when the onus is on the recipient to pay the invoice? Luckily, there are some tried and true ways to make sure that you receive payment on schedule and in full. Here are 6 simple ways to make sure you get paid on time so you can focus on performing the services your clients look to you for.
Get Payment Upfront
The most straightforward way to guarantee payment is by requiring that it be made before any work begins. If that seems over the top, you could request that at least a certain percentage is required before you do any work.
Set Up Expectations
Discussing payment expectations right off the bat might seem somewhat presumptuous to clients, but it’s in your best interest. Clients will benefit from having your expectations clearly laid out for them and you’ll benefit from having informed them early. At the very least, it’s a conversation you can refer to down the road if unpaid invoices become a problem; none of your clients will be able to claim ignorance to your expectations.
Talk About Rates
You can glean general information about a prospective client’s financial situation by discussing rates well in advance. If they express concern about how your rates fit into their budget or seem exceptionally hesitant, this could be a sign that they might not be able to pay on time. If you feel comfortable, you could discuss reducing rates with the condition that there will be no overdue invoices.
Remind Your Clients in Advance
You know how busy you are, but have you considered how busy your client might be? Generally, missed invoice deadlines are not malicious, but rather simple oversights. Rather than fretting about when to follow up after the deadline has passed, offer a friendly and gentle reminder in advance.
A day or two before the invoice is due, check in with the client to let them know that the date is coming up. If they don’t find this bothersome, there shouldn’t be a problem. If they find it bold, it might nudge them to pay more quickly in the future in order to avoid the reminder. If you show lenience and apathy towards the payment deadline, clients will often in turn be lax about paying on time.
Foster Close Professional Relationships
Simply staying on good terms with your clients and developing long-standing respectful business relationships can work wonders for locking down timely invoice payments. Someone who has genuine respect for your organization and is invested in the success of its people won’t want to make a bad impression or disappoint you. In addition, if you’ve had a positive impact on them and their organization, they won’t want to alienate you and risk losing the benefits of the business relationship.
Offer Rewards and Repercussions
Incentives are a reliable back up plan if your unpaid invoices are getting out of hand. You can try offering rewards such as small early payment discounts, which clients would be remiss not to take advantage of. Either in addition or instead, you could introduce late payment fees that increase with each passing month that the given invoice goes unpaid. The risk of having to pay interest could be just the motivation your clients need to start making payments right on time.
We get it – accounting can be taxing. If you’d prefer to leave these obligations to the experts, consider working with Shockley Books and watch your invoices get paid right on schedule.
Do you own a small business in Tulsa? Overwhelmed by unpaid invoices, unresponsive clients, or extensive bookkeeping duties? Let us take care of all that for you so that you can focus on growing your business and clients. Request a FREE quote from Shockley Books.