You’ve put in the hard yards for the customer – You delivered on time, You delivered on budget, and feel that you’ve surpassed their expectations. However despite the hard work, your customer is still late with their payment…again!
Late payments can impact your cash flow and threaten the future stability of your business. Here are five tips to help make late payments a thing of the past.
Be aware of who your customers are:
Not every customer is a good customer. Those who don’t pay on time are not worth the stress, hassle and time it takes to follow up with them. It’s your task to become an expert in identifying and separating the good from the bad. Do your due diligence and look into the financial history of your customers before taking them on.
Ensure your payment terms are clear:
When it comes to laying out your payment terms, make sure it’s done as simply as possible. Be VERY clear on the consequences of late payments and put a specific due date. Never put ambiguous dates such as ‘due in 2 weeks time’. For more tips on payment terms check out our helpful blog article.
Make payments simple:
If you make it difficult for customers to pay you, then you will find it difficult to get paid. Using Pay Advantage allows you to offer your customers multiple ways to make payment. It will also be easier to follow up if they haven’t paid you. Place emphasis on quicker payment methods, such as credit card or BPAY, and ensure your contact details are clearly labeled so your customer can call you if they have questions.
Reward customers for paying early:
What better way to get your customers to pay on time than offering them an early payment discount. Be sure that you’re clear on the date in which the discount is valid and ensure you communicate this with the customer when you lay out the payment terms.
Receiving late invoices is inconvenient and can impact your bottom line. However, before you get annoyed with your customer, take their circumstances into consideration. Is this the first time they’ve been late? Are they going through financial strain? Empathise with their situation to reduce the chance of them being late again. Cultivating a good relationship potentially leads to return business.
Following these five tips will help reduce those inconvenient late payments from customers.
Choose the ones that work best for you and get those invoices in on time!