6 ways to get paid quicker

Posted 11 Sep

6 ways to get paid quicker

Cashflow is incredibly important for businesses. Having more cash in your account means more capital to fund day-to-day expenses or buy new equipment. However, many small business owners report difficulties when it comes to the delay between issuing an invoice and actually getting paid.  We have listed six ways businesses can encourage clients to pay their invoices quicker

1. Reduce delays in invoicing

It’s a simple tactic, but sometimes, it can be easy to forget to raise an invoice for work that’s been performed. However, the later an invoice is raised, the longer the gap will be in receiving payment for that work. Where possible, try to invoice within one or two days of a job being completed. Several software providers offer automated invoicing, which can be especially helpful if you regularly bill the same clients.

2. Encourage part payments

One way to avoid waiting for cash to come in is to simply demand upfront payment. For example, you might ask a client to pay a deposit ahead of any work starting, with the remainder to be paid on completion, or you may suggest a different arrangement, such as payment at incremental stages of project completion. How willing a client is to agree to these terms will differ depending on the sector you work in, but this can be a great method to protect cash flow while undertaking work.

3. Enable multiple ways to pay

Making it easy for customers to pay can be a great way to make invoices get paid sooner. For consumer clients this could be credit cards or payment plan providers. For commercial clients it could be invoicing factoring or other options that allow you to receive money sooner and clients to pay over time. Make sure your invoices are clear on ways to pay, don't make a client search for how to pay, click and pay links are crucial to getting those invoices paid quickly and easily.

4. Set-and-forget reminders

We’re all busy in this day and age, and sometimes, a client might simply forget to pay their invoice. This is where invoice reminders come in handy. If a client hasn’t paid after a set time—be that a few days, a week, or longer—sending a gentle invoice reminder can be a way to jog a client’s memory. What’s more, lots of payment platforms can set this up as an automated process, saving extra time and effort.

5. Shorten your payment windows

Another way to encourage clients to pay is to reduce your payment terms. For example, if clients are currently given 30 days to settle an invoice, consider lowering this incrementally to 15 days. Applying this with new customers might be easier in the first instance. However, with longer-standing clients, consider letting them know in advance that you plan on changing their payment terms, so that they have time to ease into the new arrangement.

6. Introduce late payment fees

While it’s never pleasant, sometimes being firm in your invoicing practice can encourage prompt payment, while also setting your expectations as a business. If you have a lot of clients who fail to pay your invoices on time, consider introducing a late payment fee into your contracts, which would apply if an invoice goes unpaid after a specified period of time. If you do intend to charge fees, make sure they are reasonable and in line with business and consumer laws.

Need help with cashflow management?

Prompter invoice payment is one way to prop up cashflow, but there are other ways to boost working capital. If you’d like to know how to maximise your business’s financial position, book some time with a member of the team today.

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