You walk into a shop. You select something off the shelf. You go to the cashier and pay for it the item. We never question that. So why should you wait 30 days or more to get paid for the products and services you provide? You work hard for your clients. So you deserve to get paid on time for it. Especially if you have already agreed to a delayed payment terms. In this post, we will share some tips on how you can enforce your payment terms and get paid faster.
Getting Paid on Time
“Getting paid on time and maintaining a healthy cash flow is how a business survives.” -Craig Hudson, Managing Director NZ & Pacific Islands at Xero.
Have you ever had issues getting paid from a client? If you haven’t, it will happen sooner rather than later. At WorkflowMax, we have worked with a lot of business in different industries and learned a few tips for getting paid.
1. Send a reminder
This is often overlooked which is why it’s important to have on this list. Running a business can be overwhelming and things can get missed. A reminder is often appreciated!
2. Change your payment period
If you have a lenient due date for payment of invoices, chances are some clients will pay you late regardless, even if it is 60 days after it is sent! Try reducing the due date on the invoice, some clients may still pay late but this gives you an excuse to send a reminder and get the money you have earned in the door earlier.
3. Incentivise Early Payment
This is a trick a lot of energy companies use. An early payment discount is great for rewarding clients for paying promptly. That said, make sure that you are still making an acceptable profit from the job. Don’t know if your jobs are making or losing money? The Job Financial Summary Report in WorkflowMax calculates this at the click of a button.
4. Penalise Late Payment
If you can’t afford to give payment incentives, protect yourself and the cost of recovering the money by having fees in the invoice for late payment. That way, if payment is late at least you will be compensated for it.
5. Upfront Payment
One way to guarantee payments is to get paid upfront. That way you aren’t doing any work that you haven’t been paid for. Depending on the industry, getting paid in instalments may be a better alternative.
If you struggle to remember which invoices need reminders sent consider using your accounting software to send automatic reminders. If you have WorkflowMax and Xero and invoice out of Xero you can set this up.
7. Utilise your Accountant or Bookkeeper
Your Accountant or Bookkeeper is one of your businesses useful assets. Use them to help send invoices and follow up on those who haven’t paid you yet!
Have any tips for getting paid faster? Share it with the WorkflowMax community in the comments. As always, feel free to reach out to us on Twitter @WorkflowMax