One of the biggest “stresses” of owning a business is getting paid on time and in the manner you’d like to be paid. Here are five strategies to help alleviate this stressor:
- Automate. Automate. Send out electronic invoices and ask to receive payment automatically into your business account or other online business account (e.g., PayPal®). Most accounting software programs (e.g., QuickBooksTM) have options for you to send invoices electronically. This eliminates a lot of the excuses you hear, such as: “We can’t find the invoice you sent. Can you resend it?”
- Set up early payment incentives. Many businesses have late payment penalties for custom-ers. But have you thought about early payment incentives? You could give your customers up to a 10 percent discount for paying bills or invoices early. Think of the return business you might get by implementing this simple idea.
- Keep good records. It’s important you keep record of when customers pay and how much. Store your invoices, bills and documents in one place – preferably online. Having everything in one place helps you track and audit your client payments and improves the level of security you have for your records.
- Send reminders. When customers don’t pay on time it’s not because they don’t want to, but more likely because they forgot. Send an email to customers to remind them when payment is due. And, if possible, automate this reminder.
- Tighten your invoice and payment window. Many businesses have a standardized way of asking for payment – invoice once a month and ask for payment within 30 days. You don’t have to follow this strategy! Consider invoicing your customers more than once a month and asking for payment within one or two weeks. This increases the invoices you track, but it pays you more frequently for work completed or products and services rendered to customers.
By following these simple strategies, you’ll get paid faster and in the manner you prefer.