One of the biggest pet peeves of small business owners is late-paying clients. We’re not running corporations, so cash flow can make or break our businesses. And when a client doesn’t pay on time, we can’t pay our own vendors.
It’s a sticky situation, but with a little strategy to light a fire under your clients, you can get paid not only on time but even seven (or more) days early.
Look at Why They’re Paying Late
If you have a client who typically pays on time, one late payment may be nothing to worry about. But analyze your accounts receivables to see if you have other clients who habitually pay their invoices after your due date.
Payment Policy
Next, look at your payment policy. Is it clear on each invoice when the payment is due? Do you let your client know at the beginning of your business relationship when payments are due? If it’s not clear to a client when you expect a payment, you can’t blame them for the problem.
If this is the case, send an email letting your clients know your payment policy. Consider sending this to all clients so those late-payers don’t feel you’re picking on them. Make it objective and simply a notification of your company policies. And make sure that due date is clear on each invoice.
You can also send a reminder a few days before the invoice is due. It’s completely understandable that your email invoice might have gotten lost in the stack of emails in your clients’ inbox.
Offer Incentive to Pay
There’s two ways to go about this:
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