By Tiffany Rowe
When you’re a busy business owner, you likely always have a huge list of responsibilities to take care of, from sales and marketing tasks to client and team management, administration, and more. If you’re a working parent, then you probably also struggle to balance business and family life.
One of the areas that many people put off dealing with first, because they are either too busy, hate the topic, or feel too stressed out by it, is that of finance. In particular, chasing payments from customers tends to get moved down the to-do list. Small business owners often struggle with this task, and can let late payments slide until they find that their cashflow is being increasingly affected as a result.
If the thought of having to hound your clients for money makes you feel sick to the stomach, remember that there are strategies you can adhere to that will not only make the process less stressful, but which will also free up more time for you as well. Read on for the rundown on five ways you can sort out customer payments today.
1. Make Payments Convenient
The first thing you need to do is actually just ensure that it is easy and convenient for your customers to pay you. One of the best ways to do this is to put systems in place where clients don’t have to remember to make a payment, or where they can do so quickly and easily at any time.
As an example, consider setting up automated direct-debit transactions. This way, clients only need to give you their details once, and then funds can be transferred out of their bank account on a regularly weekly, monthly, quarterly, or annual basis, depending on the type of product or service they buy from.
Alternatively, you might want to set up an EBPP payment system (electronic bill payments) whereby customers receive invoices digitally that they can pay at any time of the day or night, from the comfort of home, work, or even on the go.
If you run an e-commerce business then you should also always use a payment processing firm so that shoppers can pay via credit cards or PayPal at the time of purchase, with “no mess, no fuss.” Putting these types of payment systems in place will ensure that you not only get paid more quickly every time, but also that you don’t have to spend lots of time chasing up money.
2. Utilize Credit Checks
If you run the type of business where many of your clients expect to receive payment terms of 30-days or longer (such as in the wholesaling or manufacturing sectors), you may very well find yourself chasing overdue payments on a regular basis. A simple yet effective way to cut down on the number of unpaid bills you have to chase (or simply write off) is to run credit checks on all new clients.
Before you allow a customer to go onto an account, you should first ask them for the details of a minimum of three other businesses they have dealt with on a credit basis in the past. Contact each of these firms and find out what the client’s payment history was like. If you would prefer to not do this check yourself, you will also find that there are plenty of companies who provide these services for a fee.
3. Put Clear Payment Terms in Place
Next, you will make on-time payments much more likely if you make your payment terms clear in the first place. Go through your terms with people up front so that they know exactly how many days they have to make a payment, and then also ensure that all of your invoices have the due date included on them in a large, clear font. This should always be positioned in a prominent spot on the bill that can’t be missed.
4. Issue Regular Reminders
You probably find that many of your clients pay their invoices past the due date simply because they forget all about the bill, or because they didn’t actually receive it in the first place. To limit these types of problems, you should send out regular reminders to all of your clients. This should be done as soon as an account becomes overdue, and then every week or fortnight after that until payment is made. Keep in mind that there are plenty of online tools which can automate this reminder service for you.
5. Offer Incentives for On-Time Payments
Lastly, you will also take the stress and hassle out of customer payments if you provide incentives to your clients for paying their bills on or before the due date. There are lots of different incentives you could try, and these will vary according to your business and the industry you’re in, but consider things such as providing a five percent discount for early payments, or giving customers faster shipments, bonus goods, or discounted shipping rates for timely payments.
Tiffany Rowe is a marketing administrator who assists in contributing resourceful content throughout the World Wide Web. Tiffany prides herself in her strong ability to provide high quality content that readers will find valuable. She enjoys connecting with other bloggers and collaborating for exclusive content in various niches. With almost two years of experience in blogging, Tiffany has found herself more passionate than ever to continue developing remarkable content for all audiences.