Money is the fuel that keeps your business moving. Without it, you immediately start running into trouble. Managing your finances is crucial, but sometimes the problem doesn’t start from your end, but rather the customers and clients you serve. Any business that relies on being actively paid by other parties, especially after services are provided, is likely to run into some issues with getting paid. Here are a few tips to make those issues less prevalent and more manageable.
Set Clear Payment Terms
When you’re setting up your business and deciding on how you provide your products and services, you need a clear understanding of what you’re providing and for what, as do your clients. If you’re selling a product in an online storefront, that is a lot easier than if you’re providing services, especially complex or multi-faceted ones. As such, you should ensure that you have fully itemised client agreements that also include clear, written payment terms that your clients sign before any work begins. Specify due dates, accepted payment methods, late fees, and milestones if applicable. These terms should appear in contracts, proposals, and invoices to avoid confusion.
Keep Your Invoices Concise And Consistent
If you have to rewrite your invoices for every new client, then it’s very easy for errors to build up, which can lead to misunderstandings and you not getting paid when you should be. A consistent format helps avoid errors and makes it easier for clients to process your request. You can easily find a free invoice template that allows you to create your own reusable format. Include your logo, contact information, charges, due date, and payment options to avoid any confusion.
Track Them After You Send Them
You should avoid delaying billing as soon as possible, sending an invoice to your client as soon as your work is completed, or when you reach any point of payment as specified in the agreement. It not only shows your professionalism, but it also gives your clients more time to pay before they’re officially delayed. You can use to tools to track when invoices are sent, viewed, and paid, as well as when you can send a professional, polite, but clear reminder on any due payments.
Enforce Late Fees Where Applicable
If you want to give clients extra incentive to pay when they’re supposed to, late fees can be an effective tool for motivating them. Make sure that they are clear and even bolded in any agreement so that your clients have paying their invoices at the top of their mind. You may want to occasionally forgo late fees in consideration of clients who are facing mitigating or unforeseen circumstances, but you should try to be consistent with late fees when possible, to make sure that you don’t set any standards for clients to become chronic late payers.
In many cases, a lack of payment is not going to be an active choice by a client, but a misunderstanding or accident of circumstance. However, you still need to get paid. Don’t let it slide, set policies and follow them.
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