How to Get Paid Quicker in Business
You’ve done it. You’ve produced _____ (fill in the blank here), and sold it to your client. They are happy. You are happy. Your office cactus is happy.
And now it’s time to receive your cash so you can spend it on something wonderful like cloud accounting, hiring an intern, or ordering another office cactus.
BUT, how do you know your client will pay? Have they remembered they owe you a billion dollars? When you email them, does their auto responder suddenly tell you they’ve moved to the Maldives with their Aunt Shimona and Aunt Shimona’s grey cat Dorothy?
Luckily we have got some amazing tips to give you to prevent non or late payments so that you will never be out of office cacti money.
Tip 1. Set expectations up front
Remember: contracts contract contracts. If you have a big project coming up for a client, get them to sign a contract agreeing that they will pay x amounts by certain dates. You sign. They sign. This way if they forget information about payment you can refer back to the contract, so that you are both clear about what is going on.
Tip 2. Use a cloud accountant
Cloud accountants can set up online software for you that you can use to send out invoices and will remind you who owes you what. The software even sends late payment reminders to clients on your behalf, so that you don’t have to. This automated service will save you time and money, so you don’t have to use out-dated excel sheets to track who has paid and when.
Tip 3. Set up payment interest on late payments
People are more likely to pay quickly if they will be charged interest on late payments. You can set up the amount of interest you want clients to pay in time intervals of your choosing on online invoicing software such as Xero.
Tip 4. Get a reference for a client
Before deciding to take on a new client, it can be helpful to get a reference for them. For example if you have mutual contacts on LinkedIn, you can ask your contact the down-low on the potential client. You can also read Google reviews about the business of the potential client if you are working with a small business owner, and see if they would be good to work with. Generally behaviour carries, and if they are not easy to work with, it’s likely their invoice paying skills may not be top notch either.
Want someone to take of your accounting for your small business so you don’t have to? Contact us for a free consult.