One of the biggest challenges of being a small business owner is convincing clients to pay invoices, especially when you’ve asked more than once. It’s easy to waste hours mailing and re-mailing invoices, digging through old communications to determine the hold-up, making uncomfortable phone calls, and harassing customers with reminder emails. All to get the money your business has already worked tirelessly to earn.
The following tried-and-true techniques will help you get your money faster. They’ll improve your startup’s invoicing process, starting with proactive policies and finishing with savvy automated invoicing systems.
Tips for faster collections
Celebrate that you’re in the driver’s seat. As the owner of your own small business, you have the power to set proactive policies that help you get money fast by promoting timely payment. Are you having problems convincing clients to pay promptly? For immediate results, check to see if these four must-have policies are in place:
- Payment first
If your company has a history of late-paying customers, implement a pay-first policy. Require that clients pay in full or leave a specified deposit before receiving the desired service or product.
- Invoice quickly and routinely
Here’s one simple hack for entrepreneurs: bill often, bill early. Create a schedule, and stick to it. Sporadic invoices months after the fact are a mess for both you and your clients. If it is not intuitive, it will not be remembered. If you currently allow 30 days before payment, consider tightening your timeline to seven or 14 days. Send the first invoice promptly after the transaction, while the customer still has your business on their brain.
One final tip: Avoid at least one awkward phone call or letter by invoicing a second time before payment is due, not after. Frame this early invoice as a friendly reminder, doing the customer a favor, instead of the more direct tone that you will use once payment is past due.
- Outline fees
What happens if your customer doesn’t pay on time? Clear, well-communicated consequences are important for getting money faster. Implement a late-payment fee or pause work until payment is received. One common type of fee: a 2 percent interest if payment is not reached within 30 days.
- Reward fast payment
Invoicing doesn’t have to be solely about serious rules and cold-cut consequences. Have a little fun and share your gratitude at the same time by adding a reward for customers who pay before the specified due date. And remember: always say thank you.
- Communicate expectations upfront with your customers
No one appreciates surprises, especially when money is involved. At the time of sale, present your client with clear and detailed documentation of your company’s invoicing policies. Walk them through your startup’s expectations. Keep it concise, but don’t feel the need to rush; these are important details.
- Be clear
Use everyday language. Choose language that is even more conversational than you think is necessary. For example, consider swapping “Net 30” with “Due in 30 days.” Simplicity and clarity is important, so that even if your client is just glancing at the invoice amidst a busy day, they understand what is being asked of them.
- Be polite, always
Studies show that saying “please” and “thank you” improves how promptly customers pay. No matter how stressful the situation, stay calm, and remember that manners work. Your company’s reputation is imperative; keeping every situation as professional and cordial as possible is essential.
Systems for faster invoices
Save time and get money faster with online invoicing and accounting software for your small business. These programs do the heavy lifting for you, sending and managing invoices with the click of a button. Not convinced? Take note: On average, customers pay over a week sooner when they can pay online. Here are some invoicing services you could consider.
You can automate the entire process with a complete-service system. Freshbooks is one of the most popular small business accounting and invoicing services on the market, with millions of users worldwide. The cloud-based program enables you to be as hands on (or hands off) as you prefer.
You can create a professional-looking invoice and this digital system will send, track and update client payment as it arrives. Recurring invoicing and deposit options allow customization to fit your business’ invoicing schedule. After a free trial, Freshbooks has multiple plans starting at $20. Price varies based on the size of your client database and the number of invoices you need to send.
Due is popular because it is clean and easy. “A free digital wallet that lets you make and accept payments online,” Due prides itself with transparency. There are no hidden fees, no per-transaction costs and credit card rates start at a guaranteed 2.8 percent. You can use the easy-to-read dashboard to track sent, received, saved and paid invoices.
Wave is another favorite among smaller, newer businesses because like Due, it has a simple, user-friendly interface. Ideal for companies that are looking mostly for invoicing services, Wave’s invoicing is free to use.They, of course, have pricing options depending on what you need, but at a starting cost of free, it’s not a bad deal.
- Intuit Quickbooks
Quickbooks is perhaps most popular for its accounting capabilities, but it’s equally equipped for small business invoicing. Notably, Quickbooks’ invoices can be easily customized to reflect your style and brand. A handy “pay now” button can be added to online invoices to encourage immediate and hassle-free payment. Special, more affordable payment plans are available for independent contractors and small business.
Get money, today
Let’s recap. Your business depends on steady, reliable cash flow to survive. Don’t underestimate the importance of smart invoicing, as finding the right system for your company is worth the search. Get started with today’s small business hacks. Save time and money by starting with the right policies and user-friendly technology. All of these tips will help you get money fast, keeping your business up and running all year long.