Starting a Small Business? 4 Strategies to Ensure Your Clients Pay On Time

May 2 • Business • 37 Views • Comments Off on Starting a Small Business? 4 Strategies to Ensure Your Clients Pay On Time

When starting a small business, you likely have many considerations on your mind. One of them should be how you will get paid. Being able to accept customer payments quickly and effectively is a major component in keeping a company’s cash flow manageable. Use these four strategies to ensure your clients pay on time.

Make Payment Terms Clear Upfront

Businesses are always best off outlining payment terms before work on a project even starts. This information should be in writing and part of any contract you have a client sign. At the very least, payment terms should be mentioned in any negotiations. You may also consider requiring a fraction of the final payment upfront. This is common in certain industries and especially for freelancers. The client should know how much they will need to pay upon completion wherever possible to prevent ugly surprises and so they can have the payment ready when the work is delivered.

Use Accounting Software

Having dedicated accounting software is one of the best ways to ensure you will be paid quickly. These programs keep all of your invoicing information in one place so you can send invoices and see who has and has not paid at a glance. You can also set up automated payments with these programs for repeat customers. With lower cost, cloud-based, or even free options, quality accounting software is more obtainable for small businesses than ever before.

Accept Different Payment Methods

Another way to ensure your clients pay on time is to accept a multitude of different payment options. If you only accept one or two methods of payment, you decrease the chances of making a sale or that your customer will be able to pay right away. Examples of payment methods your company may choose to accept include cash, personal checks, credit cards, electronic payments, and mobile pay options. There are technologies available such as Square payment processors that allow even the smallest of business operations to accept a multitude of payment methods.

Consider Going to Collections

Having a collections attorney you can lean on to collect delinquent accounts may be necessary, especially in some industries. For small amounts, the cost may not be worth the cost of the attorney fees. In other cases, it may make financial sense, especially for accounts that have been delinquent for a long time and interest or late fees have piled up. Collections attorneys can be part of your accounts receivable management to ensure you get the payments owed to you.

Enabling your customers to pay their bills on time is a key component of running a successful small business. Utilize these strategies to ensure you get paid. That said, keep in mind the benefit of being flexible and polite. Customers will be more inclined to pay when you demonstrate goodwill.

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