When you are running a startup, being paid on time is essential to ensuring your success. Many startup businesses rely on prompt payments in order to ensure that bills are paid on time and that the company continues to run smoothly and grow. In an ideal world, every client would always pay immediately and in full, but this isn’t always the case. Often, it’s essential to actively encourage your clients to pay on time or offer incentives in order to prompt them to make a payment. Doing this can often be tricky for new entrepreneurs, but thankfully, there are plenty of different methods that you can use in order to ensure that you receive payments when requested. We’ve listed some of the best ways that you can do this here.
Invoice Factoring
For many new business owners, invoice factoring can provide an excellent way to ensure that you’re not dealing with any cash flow issues when it comes to client payments. Using an invoice factoring company means that you will ‘sell’ the invoice to them in order to receive a large percentage of the funds owed immediately. Once your client has made the payment, you will receive the remainder of the money owed, minus the invoice factoring fee which is usually a small percentage. Picking a factoring company in order to help you have a more manageable cash flow can be one of the best financial decisions that new business owners make.
Incentives
When it comes to encouraging your clients to make their payments on time, offering incentives can be an excellent method of doing this. Incentives can prompt clients to pay sooner, as they won’t want to miss out on whatever it is that you’re offering them in return for doing so. Offering small discounts, such as 5-10% off their order or their next order if the invoice is paid before a certain date, can be an excellent way to make sure that you get the money that you need as quickly as possible. Small freebies, or even the chance to win something by being entered into a competition can all be excellent and cost-effective incentive ideas to encourage faster invoice payments.
Check Your Wording
When designing invoices in order to send to clients, making sure that you check your wording and make them easy to understand is important. Designing an invoice which does not make clear things such as how much money is due and when this is expected by can lead to issues when it comes to getting paid. Ensuring that you make things as easy as possible for your client when putting together and sending out invoices requesting payment is essential for making sure that you get paid on time and avoiding any cash flow issues, especially in the early stages of your company.
Be Polite
Simply making sure that you remember to say please and thank you when requesting invoice payments from clients can go a long way when it comes to how quickly you get paid. Studies show that invoices which use good manners tend to be paid on time and in full more often than those that do not. Ensuring that your clients know that their prompt payment is appreciated is a simple yet very effective method of encouraging this as a long-term habit. So, don’t forget to say please and thank you!
Send Reminders
Often, invoices don’t get paid on time due to simple forgetfulness. It’s important to understand that your clients may not always remember to pay your invoice, and sending a friendly reminder can be a great way to give them a hint without coming over as too aggressive. The longer that you wait in order to send a client a reminder for payment that is overdue, the more issues that you’re likely to have when it comes to getting your money. Because of this, getting reminders sent out to clients as early as possible can not only prompt anybody who’s forgotten about it to pay, but can also save you a lot of hassle in the long term when it comes to retrieving payment.
For many new business owners, cash flow issues need to be avoided at all costs. When you’re running a company which relies on client payments in order to ensure that the bills get paid, making sure that those payments are made on time should be a top priority. Thankfully, there are many different methods of avoiding unpaid or late invoices and the problems that this can cause for your company.
