In an ideal situation, your business is contracted to do a job, the job gets done, and payment arrives on time. Unfortunately, this isn’t always the case, especially for contractors, freelancers or small business owners. Your expectation of being paid on time is not unreasonable, and late payments can cause permanent damage to your company, or at the very least set you back where it becomes difficult to catch up with expenses. To help ease any potential headaches, there are a few simple things you can do to make sure payments arrive on time.
1. Setup payment expectations
Inform your clients of not only the cost of the work, but also what the payment schedule will look like, including when final payment is due. If you’re organized, straightforward and equipped with a service contract from the beginning, your client won’t be able to concoct an excuse based on “not clear” instructions. Ask to receive at least some of the payment upfront, if possible. This way you’ll be able to mitigate any issues in the future. After you have this discussion, your payment terms and expectations should be clear.
Reminders also do wonders for both you and your client. Life is busy and sometimes we forget the most important of things on the to-do list, even getting paid. Send a reminder to your client of the payment due date and amount once you’ve completed the job.
2. Follow up
Don’t hesitate to reach out to your client if you haven’t received payment within three business days after sending the invoice. Clients, like you, are busy and may have overlooked the processing of the payment. Send a friendly reminder a few days following your initial invoice date. In addition to following-up, you should make the payment process as easy as possible. There are plenty of online tools, such as PayPal, that will help you and your company collect payments with less effort. Remember, the less time it takes your client to make the payment and the easier the method, the faster you’ll get your money.
3. Send the invoice to the correct person
What seems obvious isn’t always obviously followed, so make sure to send your invoice to the correct person with his or her name spelled correctly, including the right billing address. Whenever you’re having a financial discussion with your client, be sure to cover all the bases. It takes two minutes to hash out who’s making the payment, which will save you time in the long run.MORE NEWS: UM Study Shows Healthcare, Service Workers Were Disproportionally Impacted By The COVID-19 Pandemic
This article was written by Tabitha Shiflett for Small Business Pulse