Want to get paid faster? Here are 6 ways to make it happen
This week I was sitting down with a client and an all too regular comment was made - “Seriously, why can’t people pay on time?” No matter what the size of the business, they all ask the same question. Getting paid according to our standard terms is all we want, yet it seems to be one of the biggest challenges we face.
Chasing delinquent accounts costs us time and money. Quite frankly, ain’t nobody got time for that!
Despite not being able to control the actions of our customers/clients, there are a few things we can do to encourage or even better, entice them to pay on time. Here are a few measures that work well:
Offer an early payment discount. Where you have some room to move in your margins, offer clients a discount for payment made before the invoice is due. This can be most beneficial for clients that regularly pay late by providing them with a financial incentive to get their act together.
Request part or full payment at the time the order is placed or service is rendered. If they want it, they need to pay for it there and then.
Increase prices for regularly delinquent accounts. If it’s going to cost you time and money chasing them, they might as well compensate you for it with a bit of pain money.
Charge a late fee. Although not always legally enforceable (best to speak to your legal advisor), it can work as a deterrent and encourage timely payment.
Offer a direct debit service. Remove the need for clients to process payments and schedule it per your terms. The only risk is that there aren’t adequate funds in the nominated account at the time of processing, so a separate process should be implemented to ensure funds are collected on an alternate date and a posible dishonour fee is charged.
Provide access to an online payment gateway via your emailed invoices. Instead of processing payment via their banking platform, make it easy for customers. One click and they are directed to a payment page.
As always, good debtors control processes and procedures form an integral part of any cash flow management system. Read more about it here.
Have you had success implementing an initiative to get paid faster? If so, we’d love to hear about it. Drop us a line at info@brambleandbriar.com.au.