How to get clients to pay invoices on time
Create invoicing and payment processes that result in more on-time payments while maintaining great relationships with your clients.
One of the most challenging things about running your own business is chasing clients to pay an invoice when their payment date has passed. It impacts your cash flow, which can prevent you from effectively running your business and covering operational expenses.
Some common reasons clients miss their payments include incorrect information on invoices, failure to receive an invoice, or cash flow issues. Fortunately, there are some surefire ways you can get your clients to pay invoices on time, so let’s dive in.
How to get clients to pay invoices on time
1. Ask for payment upfront or a deposit
In many professional services like accounting, asking for upfront payment before handing over completed work to your client can be a great way to simplify the accounts payable process for your client. Asking for an invoice payment before sending over your finished project can prevent many headaches and can even strengthen your relationship. You’ll get paid faster if you ask for payment before delivering a service, especially if it’s urgent.
In some industries, asking for upfront payment is more complex. In these cases, you can ask for a deposit before starting work for that client. By asking for 50% of the total amount before doing client work, your small business can better manage its cash flow to continue paying bills, employees, and other costs. Breaking costs into manageable chunks provides financial flexibility for your client’s bank account too.
2. Allow payment via various methods
When you ask a client to pay an invoice, offer them multiple payment method options. For example, some prefer online payments, like a bank transfer or a debit card payment, recurring payment via their credit card, or offline payments such as a paper check.
Leaning towards electronic invoices and payments are a good measure for preventing something from getting “lost” in the mail. Still, you’ll want to be flexible with the payment methods that your clients are most comfortable with.
3. Double-check your invoice
With paper invoices, mistakes can cause a delay in payment due to the time it takes for a client to receive it. Where possible, send digital invoices to clients to quickly and easily correct numbers as needed. Before asking for an invoice payment, ensure you triple-check the details of what you’re charging customers and what’s been agreed upon.
When issues arise due to a disagreement in the costs or time spent on a project, it’ll slow down the process of someone paying invoices on time. So, aligning with your client will be crucial to your timely payment of services rendered.
4. Bill frequently
It’s much easier to ask someone to pay an invoice on a biweekly or monthly basis than on a quarterly or yearly basis. The smaller the payment owed, the easier it’ll be for your client to pay it. Recurring payments simplify the payment process for your clients, as they’ll always know when it’s coming. If you want someone to make an invoice payment, divide the payment into multiple, manageable chunks that don’t eat into their cash reserve.
5. Use the right software
There are countless accounting software programs available that you can use to manage your upcoming payments and the invoices you’re waiting on. You’ll want a tool that allows clients to add their credit card details or the right payment method of their choice. By sending an invoice online, you increase the chances of clients paying promptly since it’s convenient and quick.
A tool that sends emails regarding payment confirmation details, such as when someone makes invoice payments, will help you stay on top of the invoicing cycle. Using one tool for all your clients will simplify filing invoices, especially during tax season. One effective tool that helps clients pay invoices with ease is B12, which also lets you handle other business tasks and consolidate your tech stack.
6. Create a retainer agreement
In professional services, particularly in legal, retainer agreements are common. They help you get paid on time for all your invoices while strengthening your client relationships. After all, recurring payments are a great way to ensure your client pays an invoice you’ve sent them. The accounts payable process for your client simplifies drastically when smaller, regular invoice payments are made.
7. Be clear about late payment fees
Setting the payment terms on your client’s initial agreement will help prevent late payments. You can include the payment terms in a few sentences on your contract to help nudge customers. Adding a late payment fee is another effective way to help encourage customers to pay on time. As you’re well aware, businesses prefer cutting costs rather than increasing them.
Relatedly, you can also offer a discount for early payments. Including these two structures in your online invoice might encourage some people to pay early to receive a discount and save their own business money.
8. Send invoices to the right contact
In the early stages of setting up a new client, it’s crucial to have conversations about billing. Sometimes, someone other than the person you’ve been communicating with is the right person to send your invoices to. Typically, accounts receivable departments pay an invoice when it’s received. Knowing the exact email address or contact details of the person responsible for making the payment will help ensure your client’s payment lands in your bank account quickly.
The last thing you want is for your invoice to bounce around to multiple people. Be clear on who the primary contact is, so you can send invoices, payment reminders, and work out a payment schedule with them to ensure timely payments.
Send professional invoices with B12
You can automate your invoices using B12, a website builder and all-in-one online platform for service business. It’s easy to create, send, and manage invoices within B12, which allows clients to choose their preferred payment method using Stripe.
In seconds, customize digital invoices that match your firm’s branding. Duplicate previous invoices to save time. You can choose from one-time or recurring payments and add your payment amount for your consultation or service. Offer discounts, charge taxes, or add fees. Plus, B12 enables you to send automatic reminders that encourage clients to pay on time and get you paid faster.
B12 is the best ROI for a professional service business owner looking to build a professional website where you can manage everything from attracting new clients to retaining them.