13 Jul 9 Useful Strategies for Getting Clients to Pay On Time
Written by Jami Oetting
Everyone is trying to manage cash flow. But no matter how buttoned up you might be in your process, it still could mean clients pay late, which messes with your stability.
Here are nine strategies to make sure your clients are ready and able to pay your agency’s invoices on time:
1) Watch for Red Flag Clients
They always give themselves away, even if we decide to overlook the signs in the effort to get a new client signed. They’re overly focused on price, or poorly organized. Or worse, they have a generally unpleasant attitude that’s going to make working with them difficult.
These are the kinds of clients with a high likelihood of not paying on time. Your best strategy is to avoid them if possible. Weigh how well this potential client fits into your agency’s goals against their potential maintenance costs, including late payments.
If you decide their potential outweighs the risks, you can use many of the other strategies discussed here to mitigate the challenge.
2) Set Clear Terms in the Contract
Nobody like surprises, least of all when they’re being asked to part with their money. Your contract should clearly spell out key payment terms: when invoices will be sent, when they’re due, how payment will be made, what your late payment penalties are, etc.
3) Make It Easy for Clients to Pay You
If the client says they have a preferred payment method use — let them use it. You can negotiate your payment method flexibility as part of your service. There are multiple services that let make it easy for any business to accept ACH, credit card, PayPal, or EFT transfers. Sign up with one so you have that flexibility.
And if their preferred payment method is still by paper check, let them do so — as long as the checks arrive on time. If they don’t, then you can move onto one of these other strategies, such as auto-payments from a credit card.
4) Move to Electronic Invoicing and Payment
Again, you have a lot a of choices of online invoicing and payment tools.
Many of the online invoicing tools let you create a client portal where people can see all their past and current invoices. Now, your clients have no excuse (“Your invoice didn’t arrive”). They always know where to find their latest invoice and can’t blame technology for miscommunication.
And when you integrate an electronic payment option into your invoice, then clients can pay as soon as they open the invoice. It’s simple and easy. Some invoicing tools will let your clients store their payment information so they don’t need to re-enter it for each invoice. Others have automated payment options — with your client’s permission of course.
Electronic invoicing makes preparing and sending invoices easy for you. A client can’t pay on time any invoice that’s sent late.
5) Bill New Clients a Deposit to Get Started
This is more than just a goodwill gesture and hedge against a potential flaky client. It lets you and the client iron out any invoicing or payment wrinkles that might come up early. Getting paid your deposit verifies that all mechanisms are successfully in place for this client to pay you on time.