Persistence is key — unless you’re talking about chasing down unpaid invoices. In that case, you always seem to find better things to do.
In a perfect world, your business receives payment the second you send an invoice. But as you may have noticed, we don’t live in a perfect world.
If you’re experiencing late payments from your customers — whether one day or 10, it’s time to get ahead. Stop waiting to get paid.
Check Your Procedures
Start by checking your procedures. What does your customer journey look like? Are you sending estimates before service begins? If not, you’re catching customers off guard, which means they may need time to move funds around to pay you.
For those who make a habit of sending estimates when work begins, make sure the estimates are digital.
Then, check if your customer relationship management (CRM) system can quickly and effortlessly turn that estimate into an invoice — saving you and your customer the time it takes to create an invoice from scratch.
More importantly, your estimates and invoices need to state what’s expected of your customers.
Email and Text Templates to Ask for Missing Payments
Tips and tricks to help you get paid on time.
If your payment terms aren’t clear, don’t expect to see your money on time. You’re creating further delayed-payment risk for yourself.
Make it clear by sharing what’s expected:
- Payment In Advance: Payment made before service is provided in any form.
- Cash In Advance: Payment made in cash before service is provided. (We don’t recommend this — documentation is your friend.)
- Upon Receipt: Payment due upon service completion and client receives the receipt.
- Net 7 (or 21 or 30): Payment due by a certain number of days following the completed service (or invoice receipt). It’s a fairly standard invoice term, but “payment due in (number of days)” would be even more clear.
- End of Month: Payment is due by the end of the month.
- 50% Upfront: 50% of the payment is due before service is provided. This should be combined with one of the above terms to ensure on-time payment for the latter 50% of payment.
Allow for Flexible Payment
While you’re due the money you’ve earned, if you don’t make paying your business easy, you’re going to run into issues. It’s always a good idea to stay flexible when it comes to how your business accepts payments.
Not everyone uses PayPal or wants to swipe their credit card when paying. It’s important to have options — you’ll especially want to include bank transfers, also known as automated clearing house (ACH) payments.
ACH payments are electronic payments made between banks and typically cost less than credit card transactions.
By offering various ways to pay, you make it hard for customers to pay late.
Payment Plans: Big ticket items are a doozy. By breaking up payments for costly services, you can avoid creating financial burdens for your customers. At the same time, you’ll win more customers who would’ve gone without the service because of the cost.
But if you don’t want to monitor when each payment is expected, consider the next option.
Scheduled Payments: Having a CRM system and a payment processor means you can offer scheduled payments. This allows you to set up an automatic schedule that pulls the money from your payment-plan customer on the specified date.
It helps your customer stay on schedule and keeps your cash flow consistent.
Online Payment: This puts convenience in your customer’s hands. They can pay before services occur or make early payments without having to wait for an invoice.
Pay-by-Text: Text message invoicing is a fast and easy way to communicate with customers and get paid with a click of a link. In fact, nine out of 10 consumers prefer texting with a business compared to all other forms of communication.
Offer Incentives for Early Payments
Let’s be honest, you could issue late payment penalties to scare customers out of paying late. In fact, for the sake of your cash flow, you should. But, remember the phrase “you catch more flies with honey than vinegar.”
If you want to get money in before deadlines, offer positive incentives.
- Discounts for early payments.
- A membership that rewards on-time payments with additional support or lessons.
- Special offers when customers meet a milestone, on-time payment.
Follow Up for Follow Through
How often do your customers hear from you about upcoming payments as opposed to overdue ones? You’ll get more money on time when you send customers gentle reminders about their approaching payment dates.
Automating this step is for your benefit. You save time from calling, texting and typing repetitive messages, and can focus on the real work of serving your customers.
And when you have text or email automation set to alert customers of upcoming payment dates, you are more likely to avoid bounced payments due to insufficient funds.
When those mishaps occur, both you and the client feel that financial pain.
Automated messaging also keeps your customers in the know. They want to pay you. But sometimes they just need the reminder ahead of the due date instead of the late notification after.