Waiting to get paid - we’ve all been there. There’s nothing worse. You check your online banking, refresh your inbox, write (another) text message, then delete it because it feels too desperate... You’ve reached the end of your tether. There’s literally no more tether.
And whether it’s because you need to pay for materials, staff wages or bills - late payments are once again causing chaos for your business.
How do you get your customers to pay on time? You're about to find out. Adele had this same issue back in 2008. She thought she only had two options - give up, or chase payments.
But she was wrong. So without further ado, here are...
First of all, let’s check the way you’re invoicing your customers. (This is often overlooked). As soon as you complete a job, your very next step should be to send the invoice.
Any delay in getting the invoice across to your customer gives them an excuse to delay payment to you.
Make the jump to digital invoicing (if you haven’t already) to help speed up this process.
Your customers aren’t mind readers. If you haven’t asked them to pay within a certain time, they won’t. So it’s super important to set expectations. And set them early. The best time to do it is when you’re sending your customer a quote.
All (decent) online business quoting tools will allow you to upload a T&C document with your quote. (If yours doesn’t, use quoting software that does). Including a downloadable T&C document within your quote is a master stroke. It’s an efficient way to get your customers to agree to your payment terms at the same time that they agree to your service. Two birds with one stone.
Now whenever your customers accept a quote, they’ll have your business terms handy and know what to expect throughout the job. Plus, they’ll be more forthcoming to any payment requests you make if they’ve already agreed to them.
When you set these up, you’ll never look back. This is a game changer saves you hours of time. All good CRMs will allow you to send email reminders to your customers when their payments are due (and overdue). They’re flexible too. You can send overdue payment reminders at 3 days and 7 days if that works best for you. Or even 3 days before a payment is due to plant the seed early. Whatever works for you. You can tailor the message too and make sure each email is well received by your customers. Make sure you do as well - no one knows your customers better than you. A reminder written by you will resonate better than a generic one ever will.
Let’s think about this from your customers point of view - take a look at your own payment process from start to finish. Are your invoices interactive? What payment options are you offering? Can your customers pay by card? Can they accept your business with a deposit? (i.e. a more manageable payment amount)
Interactive invoices give your customers a better experience. And the most effective ones will streamline your payment process. This minimises the time it takes for your customers to pay you, and the number of steps they’ve had to make too. It’s in your best interests to simplify this process as much as possible.
The final step in their payment journey is the most important. Don’t lose sight of this. When it comes to actually taking customer payment info and sealing the deal, instant card payments are the most effective option. It’s the fastest and easiest way for your customers to pay. If you aren’t currently offering this payment option - you should start. Read more on instant card payments here.
Ultimately, the more payment options you offer your customers, the better. Make the process as convenient as possible for them and you’ll get paid quicker.
And speaking of convenience - allow your customers to accept your business with a deposit payment and pay the rest later. Better to to take 30% payment now (and guarantee business) than 100% later (and risk losing the job).
Offering a discount to customers who pay early may initially seem counter-productive. But, in many cases, it can be financially beneficial.
How much are late payments costing you? It’s worth finding out. If it’s a significant amount, it might be worth incentivising your customers to pay early with a discount. If it’s well thought out discount (i.e. less of a financial burden than late payments), then you’ll save time and money.
Don’t get carried away - just offer enough of a discount to encourage customers to pay within your terms. Even 2.5% might do the trick.
Use a CRM that sets you up for success. Getting paid on time is easy when you use the right software. Payaca utilises all the methods you’ve read above to improve your payments. Interactive invoices, automated payment reminders, instant card payments… you name it!
Try Payaca for free and see how service businesses (like yours) are increasing their revenues by 28-32%.