For small and big businesses alike, late payments can be the bane of a company. It’s a hassle to chase clients around, hounding after them to please pay up.
Sometimes it’s simply because it slipped their mind. Sometimes it isn’t, but either way there are strategies you can put in place to help avoid them.
From invoicing techniques to contingency plans these techniques will help you to get paid on time.
The devil in the details of your invoice
Whether your invoice is digital or paper it needs to be as clear as possible. You want it to be easy to pay, and thus the amount owed and ways to pay should be marked clearly.
An attractive invoice can really make a surprising amount of difference. Let’s face it – bills are boring. So, make it look less like a bill (without compromising clarity).
Using a service like Master Proposal can give you a well-designed invoice for a nominal fee that can be fun or stylish, whatever suits your branding.
If you really want to get technical, you can take your lead from colour psychology and presentation. For example, shades of blue are said to encourage feelings of trust and calm, which is a nice contrast the usual feeling of panic and fear that an invoice can conjure.
Also, be polite. You’re asking for money so use your manners and mind your P’s and Q’s.
Match your payment methods to your audience
Many companies or clients are keen on having a physical paper trail but others will want to champion being paper free, which is becoming increasingly popular in our digital age. Ensure you give clients the option for paper invoices and statements or a digitised format.
Experts in digital document distribution Netsend are vocal champions of the benefits of e-billing, including reduction in labour, easy access to information and promptness in payment.
They recommend getting to know your client’s payment habits. Be strategic in when and how you send invoices to encourage a quick payment. If you’re not sure how to go about this – ask your client. They know what they want, and though you don’t need to bend over backwards to meet your needs it will make them feel appreciated if you try to meet their needs.
Some customers for instance may swear by PayPal. It’s a brand they know and if the client trusts this service it can present them with payment simplicity. Using PayPal’s online invoicing system can be a very useful tool. Their invoices contain a simple ‘pay now’ button which often inspires a fast response.
For more information on invoice software options read our top five online invoice generators for small businesses.
Always have a backup plan
Consequences for late payments vary from company to company, but for the sake of efficiency and finances it is unlikely that anybody wants to end up in a small claims court battle. It takes up valuable time and resources that small businesses cannot afford to waste.
Services like UK-based Still Due provide a tool for giving late paying clients a polite warning. They work by sending the debtor a message asking them to make the payment by a set date or their debt will be published online.
This technique, paired with a friendly reminder before their payment is due, can help to avoid the messiness associated with late payment issues and allow your clients or customers to feel the obligation of payment without overbearing threat.