How to get clients to pay you on time
You’ve done the work and you invoiced the client 60 days ago, yet you are still waiting to get paid 30 days after payment was due.
Is it time to chase for payment?
Nobody wants to be chasing clients for payment. However, this is business and you are entitled to be paid for the work that you have done. Unless your firm is a bank, you are not in the business of providing credit to your clients.
So what should you do?
Set out your invoicing and payment terms with your clients early on. If you are dealing with a new client, you should consider asking for 50% of the cost upfront before you start doing work for them. Talking about your payment terms up front with your client will help to avoid any awkward conversations further down the line.
Discounts and interest charges
Some firms offer clients a discount for settling invoices early. You could offer your clients a 5% discount if they pay an invoice within 10 working days. Conversely, you could charge clients 5% interest for payments that are over 60 days late. You can set this out in your payment terms at the very beginning of an interaction with a client.
You should create a standard email that you can send out to clients as a payment reminder. Your email should be firm but not aggressive.
Set out that payment is due and make it easy for your client to click a link through to an online payments page, should they want to settle their bill immediately. You could even set automated reminder emails that go out to clients 10, 20 and 30 days after the initial invoice date.
Your clients are busy people. Sometimes they forget to process invoices and they might be a bit behind on their admin work.
Sometimes a gentle nudge is all that is needed in order to receive payment. You need to strike a balance between regular follow up and maintaining a good relationship with your clients, so that they come back to do business with you again in the future. Firm but fair is best.
If this doesn’t work and you are no closer to receiving payment, you may need to seek external help.
Get in touch if you are in this situation, as part of our role as your Business Adviser we will work with you to find the best solution for you and your business.