You expect clients to pay their invoices on time, but how often does that happen? How long does it take your clients to pay their invoices once received? Do they pay immediately? Within three days? A few weeks? Or do you have to hunt them down with multiple phone calls and emails just to get a commitment to pay by a specific date?
While it’s true that you can’t force clients to pay on time, there are things you can do to generate faster payments. Part of this includes smoothing out your invoicing process and making it less of a chore. In fact, when you streamline your invoicing, you’ll simplify your business.
Although some clients are perpetually lazy, if your invoices are consistently late, the following strategies will help you get paid faster.
1. Use integrated platforms as much as possible
Today’s tech companies go out of their way to create platforms that integrate multiple features into one piece of software. People have grown tired of having to use multiple platforms to run their businesses. Running a business doesn’t just require a few different platforms – some businesses are using ten or fifteen different platforms to function.
In the past, the a-la-carte approach to software was smart because few companies could meet user expectations when branching out into multiple areas. For example, when you found a strong CRM that also offered a shopping cart, the shopping cart system was usable but not great.
The a-la-carte software model is becoming obsolete
Things are different today. Software companies are able to specialize in multiple areas mostly because they hire remote teams with diverse expertise. For example, Syncro MSP – a popular managed services provider – has successfully integrated invoicing and billing management into their platform. This level of integration aims to save business owners time and money, and it works exceptionally well.
How many different service platforms are you using to manage your invoices? Try to find a platform that incorporates as many of those services as possible. You may still end up having to use a handful of different applications, but at least you’ll consolidate some.
2. Set expectations early and reinforce them often
Have you ever wondered how some businesses can get their clients to pay on time, while others in the same industry struggle? Maybe you know of a business in your industry that never seems to struggle with invoices. No, it’s not because their clients are better people – it’s because those businesses set expectations early and reinforce them often.
Whenever you’re dealing with people, you need to remember that they will do things in their own time unless given a specific deadline with consequences for missing that deadline. If you want your invoices paid on time, your clients need a reason to prioritize paying you first over their other debts.
Setting expectations for on-time payments needs to happen in the beginning of the relationship. This is done by showing clients you are committed to your word and you won’t tolerate breaking any agreements. For example, the first day you meet with a client, whether it’s by phone or in person, sets the stage for how fast you’ll get paid. If your client is late to that first meeting and you let it slide, they’re not going to prioritize your future meetings, deadlines, or invoices.
Hold your clients to account for everything from day one. Let them know that being late is unacceptable, and require communication in case of a true emergency. Train your clients to honor their word with you no matter how small. This is the golden key to getting paid on time and in full.
3. Don’t do business with suppliers who won’t pay quickly
Whether you find out the hard way or through a news publication that certain suppliers expect fan unreasonably long time to pay their bills, find another supplier. The New York Times ran a piece in 2015 that outed giant food corporations for requesting up to four months to pay their bills. If your preferred supplier does this, find a new supplier.
You need invoices to be paid on time and in full
Late payments are a huge burden on businesses in the U.S. and the U.K. According to statistics published by Forbes, the average client takes 37 days to pay an invoice in the U.K. It doesn’t have to be that way for your business. By employing the strategies outlined in this article, you can be one of the businesses that gets paid on time and in full.