Getting Customers to Pay you on Time

You’ve done the work. You’ve invoiced the customer 60 days ago. You are still waiting to get paid 30 days after payment was due. It’s time to chase for payment.

It’s never easy chasing customers for payment. However, this is business and you are entitled to be paid for the work that you have done. Unless your business is a bank, you are not in the business of providing credit for your customers. So what should you do?

Manage expectations

You should set out your invoicing and payment terms with your customers early on. If you are dealing with a new customer, you should consider asking for 50% of the cost before you start doing work for them. Talking about these terms up front with your customer will help to avoid any awkward conversations further down the line.

Discounts and interest charges

Some businesses offer customers a discount for settling invoices early. You could offer your customers a 5% discount if they pay an invoice within 10 working days. Conversely, you could charge customers 5% interest for payments that are over 60 days late. You can set this out in your payment terms at the very beginning of an interaction with a customers.

Regular reminders

You should create a standard email that you can send out to customers as a payment reminder. Your email should be firm but not aggressive.

You should set out that payment is due and make it easy for your customer to click a link through to an online payments page, should they want to settle their bill immediately. You could even set automated reminder emails that go out to customers 10, 20 and 30 days after the initial invoice date.

Your customers are busy people. Sometimes they forget to process invoices and they might be a bit behind on their admin work.

Sometimes a gentle nudge is all that is needed in order to ensure payment. You need to strike a balance between regular follow up and maintaining a good relationship with your customers, so that they come back to do business with you again in the future. Firm but fair is best.

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