Billing Customers & Getting Paid On Time

Billing Customers & Getting Paid On Time

Though billing customers & invoice payment collection appears to be an unpleasant task, it is essential to ensure efficient cash flow management, especially for small businesses. It can be particularly daunting and awkward if you are a one-man show and have personal relations or come face-to-face with your customers regularly. However, it does not have to be this way.With certain software & systems in place, one can establish an efficient bill collection system without hurting the sentiments of the customer or without putting oneself through the “awkwardness” of having to ask for money, which is deep-rooted in our conscience as “not nice.” Here are a few systems you can implement to ensure efficient and timely bill collection.

Consider collecting payments on the spot –

If you are a personal trainer, a physiotherapist, or any other medical specialist, or a trader who comes face-to-face with customers, it may be a good idea to have a policy in place where your customers/patients pay you on the spot. Making varied payment options available, such as cash, mobile wallets, online payment, bank transfer, etc. for this purpose will make that easier and faster.

Establish a payment policy and have it in writing –

A written payment policy that includes information about modes of payment available, advance payment, due dates, late payment charges, etc. can be presented to your customer before you start your work. To get paid on time, you need to first define what “on time” is.

Invoice promptly –

Send the invoice to your client as soon as the job is done. Make this a part of your daily routine. You will be surprised to know that though this is a very crucial step for the survival and growth of a business, a large number of companies fall back on it.

In case of big corporations, find out their payment policies in advance –

These companies have their own payment policies and are more likely to follow them instead of those defined by you. For instance, some release payments after 30, 60, or 90 days. Having this information beforehand can help you plan the cash flow for your business accordingly, and save you from frustration later.

Formulate a follow-up schedule/policy for your company –

Have a policy in place regarding when you will start contacting your customers for payments owed to you. If your payment policy states that payment is due within 30 days and this is clearly stated on your invoice, you can start following up with your customer after around 45 days. Being on top of receivables is an important part of ensuring efficient cash flow. Most importantly, the older the debt, the harder it will be to recover.

Have someone else from your office to make calls about pending payments –

Have an employee such as a salesperson or accounts manager make calls regarding pending payment on your behalf. Unlike your, that person does not have personal relations with your client; hence, there will not be any awkwardness between that person and the client. You can also hire a freelance administrator for this purpose.

Accounting software –

Use accounting software that will generate professional invoices quickly and easily. You can also use it to keep track of pending invoices from time-to-time and be up to date with your finances. It can also help keep track of customers who delay payments each time. In addition, you can use it to set reminders for pending payments.Some recommended software solutions are –
Customer Relationship Management Software & Billing and Accounting Software.

Make a variety of payment options available –

Having various payment options available for your customers to pay you can speed up the process and make it easier as well as more convenient for your customers. Consider cheque, cash, bank transfers, mobile wallets, online payment, and the like.

Rewards for early payment –

Have you considered offering a small discount for early payments? Your customers are likely to be more inclined towards paying you early if they can pay less, even if it is just 10%. This strategy is definitely worth implementing to do away with the time and energy wasted on following up for pending payments, which you can spend on more productively to grow your business.

Simply pick up the phone and call –

You have tried everything – you have invoiced promptly, offered a variety of payment options, offered a discount on early payment, had an employee call & follow up, and despite having done everything in your capacity, your client is still not paying you. Now, it is time for you to get involved. Simply pick up the phone and call. Ask your client whether they are satisfied with your product/service and whether they have received your invoice. If the answer to both these questions is yes, ask about the status of the payment and when you should expect it. Make a note of that date as well as a date for the next follow-up call if required.

Don’t worry about losing the customer –

You have delivered your product/service on time, hence you deserve to be paid on time. Period. Several small businesses worry about losing a particular customer if they hassle for payment. However, that is not the case. As long as you follow up politely using the methods stated above, a vast majority of your customers will not mind.

Be aware of your legal rights –

In a worst-case scenario, be aware of your legal rights. For example, you have the right to charge interest on delayed payments. However, any legal intervention is a very time-consuming process.

Remember, it always helps to have systems in place like those mentioned in this article to ensure timely payment and do away with the hassles of recovering pending payments. Customers will never be in a hurry to pay you. If you take payments owed to you seriously, so will your customers. Here’s too efficient payment management and cash flow!

Subscribe to Receive Updates

Summary
Billing Customers & Getting Paid On Time
Article Name
Billing Customers & Getting Paid On Time
Description
Delayed payments can have a negative impact on the cash flow of small businesses in particular and demoralize you in the process. Here are a few steps to help ensure that you are able to use billing customers and recover pending payments without offending your customers.
Author
Publisher Name
EC Infosolutions Pvt. Ltd.
Publisher Logo