You’ve done the work. You’ve invoiced the client 60 days ago. You are still waiting to get paid 30 days after payment was due. You’ve waited too long, it’s time to chase for payment.
It’s never easy chasing customers for payment but this is business and you are entitled to be paid for the work that you’ve done. Unless your firm is a bank, you are not in the business of providing credit for your customers. So what should you do? Here are three tips:
1. Manage expectations
Set out your invoicing and payment terms with your clients early on. If you’re dealing with a new customer, consider asking for 50% of the cost before you start doing work for them. Talking about these terms up front with your client helps to avoid any awkward conversations further down the line.
2. Discounts and interest charges
Some firms offer customers a discount for settling invoices early. Could you offer your customers a 5% discount if they pay an invoice within 10 working days? Or, could you charge clients 5% interest for payments that are over 30 days late? You can set this out in your payment terms at the very beginning of an interaction with a customer.
3. Send regular reminders
Create a standard email that you can send out to customers as a payment reminder. Your email should be firm but not aggressive and sometimes a bit of humour can work wonders.
Tell them payment is due and make it easy for your customer to click a link through to an online payments page, if they want to settle their bill immediately. You can even set automated reminder emails that go out to clients 10, 20 and 30 days after the initial invoice date. Quickbooks Online will do this easily for you. If you’d like a 30 day free trial email email@example.com
with QBO free trial in the subject line.
Your customers are busy people, just like you, and sometimes they forget to pay invoices because they’re behind on their admin work.
A gentle nudge might be all that is needed to get paid, that’s where the automated reminders are worth their weight in gold – as long as you’re up to date with your admin.
Remember you need to strike a balance between regular follow up and maintaining a good relationship with your customers, so that they come back to do business with you again in the future. But also remember a customer is only a customer if they’re paying you!