Whether you’ve been in business for years or you’re just starting out, receiving payment for the products or services you offer is vital. When it’s time to receive payments, you want to make it simple so you can get paid on time. While there’s several ways to achieve this, it’s hard to make it stick without mapping out a strategy. Consider these few tips to get started on how to get paid on time and to get paid quickly:
Ensuring that you get paid on time requires that you have a payment policy in place. You can create a payment policy. Clarify when payments are expected, what the penalties are for late or returned payments, and the frequency of payments. Additionally, you can establish clear rules for what happens if a payment is missed. Ensure your customers have the correct expectations regarding what happens next. Such as whether or not your payment process for missed payments involves revisiting the client’s bank. You can even indicate whether or not your business will accept credit cards online or establish other types of payment solutions your business will accept, such as direct debit payments. If you already have a payment policy but still struggle with collecting on-time payments, consider revisiting that payment policy.
Sometimes missed payments can be a minor oversight, but there are times when bad habits turn into poor patterns. Sooner or later you may find yourself chasing down your customer for their missed payment. If they are willing to set up a payment arrangement to become current, you want to make sure you prevent that payment mishap from happening again in the future. You can get this done by automating your debt recovery process. Setting up automated payments to collect overdue payments is vital to keeping your profits in the black so you don’t offer your products and services in vain.
It’s not hard to miss a payment when there are several due dates to keep up with, including rent, insurance and internet services. However, you can simplify your client’s or customer’s life by offering recurring payments. Recurring payment options can encourage on-time payments because they can be automatically generated based on a fixed schedule. They especially come in handy when you have a subscription-based business model, since they ensure payments are delivered the same time, every time on the selected date.
Real-time payments offer the benefit of getting paid fast and on time. You can achieve this when you set up electronic direct debit forms for your customers. By doing so, you are offering your customers additional ways to pay without delays. You can start taking direct debit payments once they provide their information and consent while offering flexible payment solutions, such as taking direct debit payments from a bank or credit card. Either way, it allows you to get your money now as opposed to later so you can focus on running and growing your business.
A la carte services may seem like a great idea when you’re just starting out in your business. However, it’s a good idea to evaluate if they still make sense for your business as it expands. Especially if you notice a slump in your accounts receivables. Instead, you can request that your clients provide you with a retainer rate for your services. This method works well on a project basis, such as making over a website or remodeling a home. You can ask new clients for a large amount up front, such as a deposit of half the project costs. Once the deposit is paid you can then break down the rest of the payments in manageable monthly or quarterly payments based on the length of the project. Retainer rates also work well for existing customers and encourages on-time payments, since it can be set up on a scheduled basis.
Get on good payment terms from the start by implementing your negotiation skills. You don’t want to wait to do this by the time payments get past due or your commercial clients are demonstrating a pattern of tardiness or non-payment. Instead, discuss arranging payments that both you and your clients can agree and adhere to. While you may have to present counteroffers, it’s worth the banter so that you both can be on the same page and your bottom line profits won’t have to suffer from skipped payments.
Managing the flow of cash for your business is not easy, but it doesn’t have to be complex either. Good cash management calls for taking actionable measures that will facilitate getting paid on time. These include employing business payment solutions that offer recurring payments, automating payments for debt recovering and taking direct debit payments. By taking these steps and putting them into action, you can achieve your goal of getting paid on time.