Among the challenges facing business owners is how to deal with clients who pay up late on invoices without being rude. You have to find a way of being firm with your request since you need the funds to improve your cash flow while communicating politely with your client.
Knowing how to deal with late invoice payment problems will help with the improvement of your cash flow. A few tips include:
1. Create and Send Invoices Instantly
Encourage clients to pay up faster by creating a beautiful and accurate invoice right after the transaction is completed. Once your client is satisfied with your product or service, the chances of getting paid is higher than sending invoices when the thrill of getting the job done is likely fading from memory.
It is also important that you make it easier for them to pay you by taking advantage of the PAY NOW technology available on most cloud-based invoicing solutions. Online payment is a very convenient payment type for most clients.
2. Keep The Credit Card of Returning Customers on File
Should your business deal with a lot of returning customers, it is good practice for you to enter into an agreement with such customers to keep their credit cards on file. This strategy allows you to charge them yourself. You can also take advantage of subscription billing applications if your clients pay on a recurring monthly or annual basis.
You need to store their information securely after getting their written permission in accordance with PCI standards. With the help of merchant processing services who offer such services, you can be able to store the credit card of such clients safely on top of processing payments.
3. Agree On a Due Date Beforehand
The best practice is to agree on a due date with late paying customers, so you do not feel like they are being rushed with reminders for payment. Find a particular period that works best for you and enter an agreement using the time frame.
As a way of encouraging payments to be made earlier, you can offer incentives in the form of discount. This may lure the client to make the payment earlier seeing it as a gain.
4. Invoice Factoring
To improve your cash flow when the challenge you face is slow-paying customers, getting finance through invoice factoring may be a good idea. This strategy allows you to collect loans against the invoices sent to your clients.
For you to succeed, you need to make sure your invoice does not exceed 90 days along with any other consideration the invoice factoring company may have.