It can seem like getting paid on time for a job well done should be a no-brainer, but sadly it’s not that easy – here are our top 10 ways to make sure your customers pay you on time as often as possible.
1. Ts & Cs
From the outset, clear terms and conditions – including upfront payment terms – make sure everybody knows where they stand.
2. Clear orders
Again, this is about knowing exactly what you’ve agreed to – so make sure the order size and the price (per unit/hour, total, or both) are agreed in writing.
3. Deliver on time
Keep your side of the bargain to avoid any disputes, and that includes everything from delivering the goods or services as described, to making sure they are received on time.
4. Credit checks
Alongside all of the above, run background checks on your clients to make sure you believe they can afford to pay you.
5. Credit limits
It’s not simply a case of ‘yes’ or ‘no’, it’s also about how much your clients can afford – so be sure to put a sensible cap on new accounts in particular (you can always increase it as your trust grows).
6. Invoice promptly
The sooner you invoice, the sooner you’ll get paid, so make sure you send customers a bill when their order is complete, or once a month for ongoing orders.
7. Send reminders
Remind the customer that payment is due shortly before the deadline, and immediately afterwards, so there’s no excuse either way.
8. Chase debts
Chasing debts not only gets your money back in most instances, it can also allow you to claim interest and penalty fees on top, and sends a clear message to other customers that non-payment will not be tolerated.
9. Payment upfront
If a client is a credit risk, ask them to pay in advance – it’s often that simple, and in principle it’s the same as when an energy supplier installs a prepayment meter in a low-income household – perhaps not the ideal solution, but better than cutting off the supply.
10. The Stop List
Finally, if all else fails, add the customer to your Stop List, and refuse to do any more work for them until they pay in full; in some instances they will do so just to keep their order alive, while at least in others, you won’t increase your exposure to their toxic debt any further.