Late payments are an unfortunate problem that many startups must handle at one point or another, and it’s common for entrepreneurs to struggle with finding a way to get customers to pay on time without damaging their relationships.
The upside is that there are some strategies you can use to help your customers pay their bills in a timely manner without causing them to run to your competitors. In fact, some methods will help you retain your customers and ensure their shopping loyalty. New Startups shares a few examples of actions you can take to get those invoices paid early or on time:
Hire some help
Keeping track of invoices–especially for repeat customers–can be challenging when you have so many other tasks to take care of, so it’s beneficial to hire some help. An accountant or bookkeeper can keep up with how much you’re owed and whether there are outstanding payments due, but you’ll want to ensure they’re experienced and well-qualified.
If you don’t have time to sort through all the possible candidates, work with a recruiting agency that can look at the various profiles online, read through their reviews and pay rates, and find the best person for the job.
Give your customers the right tools
Once you know how to keep track of your outstanding invoices and have some help with your accounting, it’s important to give your customers the right tools to pay up. Whether they’re late or you’re just looking for ways to secure early payments in order to boost your cash flow, you’ll want to make sure your customers have everything they need to pay their bills and that they have plenty of time to pay it.
Offer various payment options and types: by credit card, money transfer, check, and cash as well as by phone, mail, online, and in-store. When you use a bank account number verification API through a secure third party, you can also help your customers set up ACH transfers, which they can then automate so they never miss a payment.
If they’re still having trouble paying on time, take steps to ensure there isn’t a miscommunication or other issue that has been overlooked, then make an effort to work with them to resolve the issue before sending out a late payment reminder. This–along with offering several ways for them to get in contact with you–will help your customers feel special.
Reconsider your payment policy
Even with the right tools, sometimes it’s a good idea to take matters into your own hands. Most business owners set a payment policy in place upon opening, but as times change you should consider making alterations to your payment system. For instance, you might require that all customers put down a deposit on purchases over a certain amount, or that they pay in full upfront for specific items or services (such as those that must be personalized and can’t be resold).
If you do make changes, ensure that your customers are well aware by sending out a copy of your policy or having it placed on your invoices and receipts.
Learn how to prevent overdue bills
Taking action to ensure that your customers have everything they need to pay up is important, but you should also think about how to prevent late payments in the future.
Give them plenty of time to pay up from the beginning by sending invoices immediately after a job is done or a product is delivered. You can also make the process a bit more personalized by sending reminder emails and postcards using their name, and by offering a small price cut in exchange for early payments, which will help them feel more of a connection to your business and prompt them to return.
Taking steps to manage your invoices and payments without damaging your customer relationships is crucial no matter how big or small your business is. Look for help from pros who can assist you with staying on track so your company’s finances won’t suffer.