How to get paid faster without chasing!
Small businesses are collectively owed $26 billion from late payments. With the average small business owner spending 12 days a year chasing unpaid invoices*. Follow our 10 tips to getting your customers to pay in a timely manner!
1. Sign up for an online invoicing solution
Using invoicing software means that your business transactions are processed and managed digitally. With reduced processing time, errors and costs, your invoicing is 60-80% more efficient than traditional paper invoicing.* Check out Honcho Invoicing for just $9/month!
2. Request an upfront payment or deposit
Research has found that 24% of small businesses that don’t insist on upfront payments wait more than a month to be paid for their services.* Establishing an agreement for a deposit prior to completion of the job or delivery of product ensures consistent cash flow for your business.
3. Issue the invoice promptly
Issue the invoice immediately after you’ve finished a job or sold a product. Honcho has made it super easy to send beautifully branded invoices on the go. After you finish a job, just enter your service and bank information into the professional template which calculates GST on your behalf.
4. Enable credit card payments
Less than a third of small businesses implement electronic payment systems which help speed up payments and subsequently improve cash flow.*
Enabling Honcho Pay allows customers to pay by card straight away online and you will receive payment from customers 3x faster than traditional methods! We find that 50% of customers pay the invoice on the same day it’s sent with Honcho Pay enabled! Honcho Pay accepts all credit and debit card payments for a super low fee of 2.9%. + 30 cents per transaction. Enable Honcho Pay on your next invoice!
5. Issue payment reminders
Send friendly reminders from your professional email address to refresh the customer’s memory and encourage them to pay on time. Additionally, using terms such as “please” and “thank you” can increase your chances of being paid on time by 5%.*
6. Negotiate clear payment terms upfront
Create a written agreement between your business and the customer to ensure there is no miscommunication. The agreement should clearly state deadlines, fees and any relevant terms.
7. Provide a discount for early payment
This is a popular method among larger organisations with many small businesses now following in their footsteps. Providing a small discount incentivises paying on time, for example “2% discount on the total invoice amount if paid by x date.”
8. Penalise late payments
Adding a small penalty for paying the invoice after the due date will encourage the customer to pay on time. Comparing the amount before and after the due date can drive a speedy turnaround. No one likes to pay more than they need to!
9. Don’t waiver on payment terms
Reiterate the payment terms and agreement for the invoice. Although extraordinary circumstances may hold grounds for a deadline extension be careful not to grant them nonchalantly.
10. Build rapport with clients
Maintaining a positive and healthy relationship with customers helps both parties reach an agreeable outcome.
Let us identify how you can start making money faster, take our Fast Money Assessment today!
Australia’s first end-to-end electronic invoicing experiment is a fact. Eeiplatform.com(2017). At https://eeiplatform.com/18227/australia-first-end2end-einvoicing-experiment/
Beattie, A. Unpaid Invoices Are Suffocating Aussie Small Businesses. Huffington Post Australia (2018). At http://www.huffingtonpost.com.au/2015/11/16/unpaid-cost-business_n_8539900.html
Rampton, J. 20 Ways to Get Clients to Pay You Faster. QuickBooks (2018). at https://quickbooks.intuit.com/r/getting-paid/20-ways-to-get-clients-to-pay-their-bills-and-invoices-faster/