Often I see business owners struggling with invoice collections. Clients are waiting for the absolute last minute to pay the bill. Everyone wants their invoices prioritized, and wants to get paid on time and without hassle. Getting paid fast also means positive cash flow. Who doesn’t want to have more money to invest into growing a business. There are several ways to be more productive when it comes to payment collections. It all starts with a good system in place.
1. Make your invoice look clean and on point. Make it visually appealing and include descriptions of what they are paying for. You don’t want to leave them confused, because it will delay the process.
2. The deadline for payment should also be noted. No deadline equals no rush.
3. Don’t wait to send out the invoice to a client. Have the invoice ready and waiting for when the project is finished and make sure it is directly delivered to the client.
There are a lot of companies to help you with credit card payments, like Stripe.
4. Set clear and easy ways to process the payment. Most people need the directions laid out very clearly. Your invoice should indicate to the client how to pay you, whether it is through a customer payment portal, via check or via credit card. Credit card payment is proven to be the best way to get paid faster. It is easy, most people have their credit cards handy and they are familiar with the process.
5. Don’t be afraid to follow up. It’s so easy for invoices to be missed or lost in a pile of other invoices. Be sure to follow-up with phone calls or emails, to be sure you end up getting paid what you’ve earned. Set up a calendar to record what days you need to follow-up with the clients that haven’t paid yet.
6. An easy way to speed up payment is to offer discounts if the invoice is paid before the due date and include late payment penalties. In your contract, and on your invoices, let customers know when interest charges will start on late payments. That usually makes clients prioritize your invoice.
7. Request upfront deposits. Deposits help you weed out clients who don’t pay and increase the odds of getting full payment. Clients would feel more involved. And this will improve your cash flow, no more using your own funds to start the project.
8. For big projects, use progress billing. If you are dealing with estimates, list your tasks and costs, add marked up cost and schedule all the phases. That will help you determine when payments will be due. You will be able to invoice the client on time to receive the payment so you could finance each phase of the project.
Get started implementing these simple strategies and you will see the results. Just don’t forget that communication is the key. Your clients need to understand the conditions of your engagement.