No matter your business size or industry, we all have those customers who always need more time to pay their bill. When money isn’t coming in on time, your cashflow tightens, planning gets harder, and you end up losing time to chasing unpaid invoices.
Late payments hurt businesses more drastically than what initially meets the eye. They create unnecessary cash flow stress, slow down growth and future investment, and drain your time through constant follow-ups and reminders.
They also make forecasting, budgeting and planning far more difficult, and can even damage customer relationships if chasing unpaid invoices becomes repetitive.
Whilst this is happening, you also have expenses of your own. Wages, supplier and tax all need to be paid on time whether your customers have paid or not.
The good news is there are simple ways to protect your cashflow and make it easier for customers to pay on time.
Staying ahead of late payments
Invoice Quickly and Accurately
If you are late to get your invoice out, or have errors that need correcting, your timeline for payment is delayed too. Aim to send accurate invoices as soon as work is completed. Make sure your invoices contain all necessary information for your customers to facilitate payment.
Send Reminders Before the Due Date
If your clients are paying late, it may not always be intentional. Often inboxes can fill up and things get forgotten without a genuine intent not to settle a bill. A reminder a few days before the due date can help jog the memory of your customers and help to reduce the amount of outstanding invoices. If you have an invoicing software, this may be able to automatically send reminders, reducing your admin time.
Offer Payment Plan Options
A big reason people delay paying is because the full amount feels heavy on their monthly budget. When customers have the option to pay in instalments, overdue invoices often disappear.
There are services that pay you upfront, while the customer pays them the balance over time. A software such as QuickFee, gives customers the ability to make instalment payments so it eases the impact on their cashflow.
There are different services depending on the size of your business, industry, and what your customers need.