Getting clients to pay on time is a perennial challenge for many businesses. In the whole scheme of life and business, well, shit happens. Clients could be going through a tough spot or they simply have not put their bills in the priority column. Regardless of what is causing slow payment, good communication is a must. Before you do anything, talk to your clients to find out what’s going on and try to work out a plan that satisfies you both. Do also consider the following popular strategies to get clients to pay on time.
Put Clients on Retainer Plan
Allowing your clients the option to pay you a monthly retainer fee might be a good option for them and you if they do a lot of business with your company. It helps to alleviate extra time for processing invoices and extra days you have to wait for payment. It also is a perfect situation in which to have money automatically sent to your firm. Consider this carefully because you want to make sure you’re still getting paid enough for your services.
Make Clear the Consequences for Slow Payment
Being upfront with clients about what will happen if they are slow to pay or even miss a payment is a solid way to deter late payments. Spelling out penalties encourages them to think twice about paying late, especially if it will cost them more money. Though collection services aren’t for every business, consider what you will do if payment is overlooked for a long period. You might want to inlist a billing or collection service if things get challenging. For instance, many firms in the CBD industry use CannaBIZ to collect on their behalf.
Collect Deposits Upfront
If you ask for payment or a deposit upfront, you immediately put yourself at a financial advantage. Not only do you get the money that you need to carry out the job, but you also have the cash in your pocket before you provide the product or service, further guaranteeing full payment will be on time. Customers don’t usually like this arrangement, so it is a good idea to back it up with a guarantee. This allows you to set the terms under which customers can have their money back.
Hold Services Until Payment Is Made
If a client who pays late continually asks for your services, consider a different style of relationship with them – one in which you don’t deliver work until they pay you. This approach might weed out those who are typically late with payments.
Offer Payment Plans
Charging clients once per year for your services can often result in sticker shock. A large bill might be too much for the client, and, therefore, breaking it up into payments could help them receive your services and pay on time. Charge by the week or the month to make payments more digestible for your clientele.