Huge profits in your business can be exciting, but what if you are not getting paid on time. Not getting paid on time is one of the most frustrating aspects businesses face, whether small or large. That’s the reason the business owners worldwide should develop fair accounting and bookkeeping practices and make sure you pay your clients timely.
Dealing with B2B customers means dealing directly with the business’s demand payment terms. So be very clear in the starting and establish defined policies that will have a seamless process. Late payments have a significant impact on your business.
Late Payment Effects Workflow
Most of the invoices work on credit, meaning they are not due on receipts. The invoices are being paid late, and when the invoice goes 90 days past, the cash flow problems arise for the businesses. Are those businesses doing something wrong? No, when the cash flow gets choked off and creates trouble for accounting and bookkeeping as well.
Make Sure you are Getting Paid and On-Time.
Growing sales is often the top priority for business owners. It is time-consuming to be in profit for your small new business venture. You need to follow a good credit flow management from the very beginning to keep things updated and paid on time.
Here are a few ways to ensure that you are being paid timely. Read them out below:
1. Create Policies
If you offer credit to any customer, make them clear about the policies, what procedure you follow, how much credit you can afford without impacting your cash flow, and making them clear if they qualify for the credits. Establish your payment terms and clarify the process of collection and if there are any overdue. To avoid late payments, you can give incentives to every client who is paying you on time. It could prove to be a good deal, and they’re gentle enough to pay your dues on time.
2. Consider Taking Strict and Strong Actions
Don’t be so eager to take action early. Analyze the situation first and know the reason why the client is unable to pay the dues.
Give some time if the person is genuine because threatening an excellent and old client can further lead to your business loss. In the end, you are collecting money for the good of the company, not the loss.
But you should take strict and legal action if your client is not paying you any reason at all. How long can a person wait? You would lose your patience once and take legal action.
So, it is always better to first evaluate the situation before you make a decision.
3. Be Professional From Very Beginning
If you want your clients to take you seriously, then portray a very professional behavior in front of them with the right attitude.
Make your website more impressive with the client’s reviews and testimonials in it. Always behave properly with them and complete the tasks on time as this shows how severe and professional the work is. Keep updating clients about the works, asking them for the reviews, and keeping them in the loop of everything you do.
This behavior shows your professionalism, and your clients would pay you on time.
4. Try Taking Partial Payment in Advance
If you are dealing for the first time with the client, you might be worried about the payment. Isn’t it? Asking for partial payment is a standard business practice for any service. This way, your payment is secured, and no genuine client would get offended by the same.
For instance, if you are completing services for your clients, you can ask for a percentage of the amount and create milestones for the rest of the payments. This way, even if your client defaults on your bills and invoices, you are already being paid for your work.
5. Invoice Promptly
When you complete the services or have delivered the goods, the very first thing you should be doing is sending them the invoice immediately.
Not doing that will make you look irresponsible, and it will slow down your cash flow for no reason. There is various accounting software and for the quick creation of the invoices.
6. Know Your Customers/Clients
Before dealing with a customer, it is always better to have a background checked and make sure the client has made the payments on time. So, before you fix a meeting, know the customer well because it is never too late.
Chaotic Client: The client who cancels the meeting or always runs late for the meetings.
Clueless Client: Clueless clients are the one who are not sure what are their goals and objectives, and there is no use working for them.
The Cheapskate: The cheapskate client is the one who always asks for negotiation and asks for a much lower rate.
7. Enforce Penalties on Late Payments
Some customers are never satisfied with the incentive concept you implement. For the customers who are not paying the dues on time, negative reinforcement like a penalty should be imposed to learn a lesson and avoid these things with the other clients. It also helps your customers know how professional you are, and this behavior will not be acceptable in the future. But yes, always analyze first before you impose the late payment penalty. Proactive Policies are the best ways of Getting Paid on Time. These are some of the best ways to ensure you are paid on time for the products and services you have provided. Having your credit policy in place can make your business go a long way, ensuring that you don’t get stuck with the debts. A sale isn’t a sale until you don’t get paid. Let us know if you have any more ideas with you!