Many companies have to deal with late paying or non-paying clients and have a difficult time dealing with the repercussions. Late client payments not only throw off a company’s accounting, but it can also result in major stability problems. In fact, over 80% of startup and small businesses fail as a result of issues with cash-flow management. If your business is having trouble with late payments, continue reading for three tips for getting clients to pay on time.
Exact Payment Terms
Don’t let your clients make a wrong assumption on payment terms, as they may believe that you operate on a net 30 basis when you don’t. Write up a contract section that explains your payment methods in detail, including due date and other important details. Work this form out with your clients and discuss the need for a specific invoice format or an in-house system for submission.
Recurring Payment Option
Those who pay bills online have benefited greatly from new technology, as many online payments have the option of recurring payments that automatically occur each month! If you are working on a long-term basis with clients, a recurring payment option allows you and your client to not worry about billing dates. If you have varying payments each month, simply set a base amount for the recurring invoice, and notify clients of any additional costs before adding them to the invoice.
Rewards For Early Payment
Clients may just need a little push to get them to pay early or on-time, and a rewards program can be the best solution. The reward doesn’t need to be extreme- a simple 5% discount for early payment may be all it takes for clients to pay closer attention to your invoices.
Another option is to use a sliding discount sale. This type of incentive starts from a high discount and slowly goes down as you approach the invoice due date, so the earlier clients pay, the more money they save. While this doesn’t always work to get clients to pay on time, it can help to ensure that you get the money you deserve for your hard work as soon as possible.
trust the professionals at the Harding group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for emails or phone calls and will strive for open communication with our clients. Whether you are interested in business advising, tax preparation, bookkeeping and accounting, payroll services, Training + support for QuickBooks, or retirement planning, we have the expertise and years of experience to help. We serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of taxes, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, YouTube, and LinkedIn.