overdue bills
When you run a practice, no matter its size, you can easily find yourself stressing about lots of things on a daily basis, from employing the right staff members and finding enough new customers, to getting a handle on paperwork, customer service, leadership, and much more.
However, for many business owners, one of the things that can become a major point of concern is cashflow. Although accountants are busy helping their clients to keep their finances in order, sometimes it can be tough not to fall victim to late, or even non-existent, payments yourself. If you do though, you will then face consequent cashflow issues that can affect your practice very negatively.
If you’ve been finding that you have to spend too much time chasing up money from your customers, or even have to right off lots of bills, it’s time to take action.
Here some tips you can follow today to make it easy for clients to pay you so that cashflow headaches are a thing of the past.
Accept a Variety of Convenient Payment Types
First up, a good way to ensure that more of your clients pay on time, every time, is to provide them with a variety of convenient payment types to choose from. These days, clients expect not to be limited in how they can finalize a transaction, and want to be able to choose the method that suits them best at the time.
As an example, on top of cash and check payment options, consider allowing customers to pay you via direct deposit, BPAY, or via a credit or debit card (the preferred method for many consumers). A number of clients would probably also wish to use their PayPal or Apple Pay account.
Other top options which can ensure you never miss out on payment are direct debits or ACH payment processing. Short for "automated clearing house," an ACH payment involves setting up individual or batch debits and credits to accounts.
These can be organized for either one-time or recurring payments, and work well for both clients and businesses because it simplifies the process and means people only need to give their details once, rather than having to remember to pay a bill each time.
Arrange Processes to Suit Your Particular Customers
Another top tip to make payments easier for clients is to tailor processes to suit your particular types of customers, whether that may be individuals, solopreneurs, small- to medium-sized businesses, or large corporations. It is important to design your payment processes specifically for the target market that you work with, rather than just putting in place whatever is the most convenient solution for you.
When you think about it, you’ll probably realize that what works for your clients is often not the same process that is the easiest or cheapest for you to implement. However, if you take a little bit of extra time, and/or spend a little bit of extra cash, you’ll surely soon find that bills are paid in a timelier manner.
For example, if most of your clients are solopreneurs or small-business startups struggling with cashflow, you might want to invoice them more often. By sending out smaller invoices every fortnight or month, rather than only processing quarterly or annual bills, it should be easier for them to find cash to pay you on time.
On the other hand, if you have lots of clients who use your services to process their individual tax returns annually, you could look at automatically deducting your fees from their tax refunds, rather than sending them out a separate bill. This way, you get the funds more quickly, while customers don’t have to worry about remembering to pay you.
Make Payment Information and Terms Clear
You can also help make payments easier for clients if you ensure that payment information and terms are clear to them, and easy to find on bills.
While it may sound like a simple, insignificant thing, in actual fact many customers put off making a payment if they think they have longer to pay than they do, or if they don’t immediately see where the payment information is on an invoice.
To counteract this, when you first take on a new client, it is a good idea to go through your payment terms with them so that there are no misunderstandings. Discuss the various elements, and even consider adding a written agreement if large amounts of money and time will be involved.
When it comes to your bills, the payment options and related information should be listed in very large font in a prominent, easy-to-find spot so that no one has to go searching for details when it comes time to pay. As well, don’t forget to make the due date for each invoice plainly visible too.
If your invoices are emailed or posted out to customers, make sure you send out a reminder on the first day that a bill becomes overdue. People can simply forget to pay you, or may never actually receive an invoice if it gets lost in cyberspace or in the post. As such, an automated reminder ASAP will help keep payments coming in on time.
Jennifer French is a content coordinator who assists in contributing quality articles on a variety of financial and business articles.