A small business can land itself into problems if it does not receive payments from clients at the right time. Usually, small and medium-sized enterprises find their money stuck in the hands of their clients. It can become a massive problem as frequent payments are what allow them to maintain their cash flow.
You might not want to put a lot of pressure on your clients but still want to recover the money. So, how do you do that? The answer is right here for you. We will discuss some tips, such as a digital invoicing app, and let you know how to deal with clients who are not paying on time.
Tips To Make Clients Pay on Time
There are different options available to recover your money and get your clients to pay on time. You can rely on these methods before and after the job is complete.
1. Find out About the Client
The best thing to do is start by finding clients who have a good reputation. You should be excited about landing a new client, but it is better to find out if the client has a habit of delaying payments.
Therefore, before you sign up for a job, you might want to check the client's reputation with regard to payments. You can find out about it by speaking with their neighbors or the local businesses. If they tell you that it was difficult for them to recover their money from the client, it is a red flag.
2. Take a Deposit
Another thing that you can do is take money upfront from your clients. You can choose to ask them to make the entire payment upfront or a small percentage of the payment. Also, make sure you get enough money on hand to cover 50% of your expenses.
In addition, you can ask your clients to make regular payments against the complete work. These payments can be on a weekly or a monthly basis, depending on the job. If the client does not clear their invoices, you can stop their order and ask them to make payments for the work to resume.
3. Use Digital Invoicing App
There is a possibility that clients are not making payments on time because you were late in sending them invoices. A delay in sending invoices can lead to a delay in payments. Therefore, you should send your clients the invoices as soon as the work is complete.
And you don't have to use traditional methods of manually sending an invoice. You can rely on a digital invoicing app that helps you send one instantly. In addition, it makes it easy for you to send reminders, follow up with clients, and inform you when you receive any payment.
4. Reward or Punish Them
Another means to make clients pay on time is by charging them late fees. You can set a percentage or a fixed amount that the client has to pay if they miss the deadline for the payment. It’s a good way to ensure that your clients pay on time.
On the other hand, you should reward customers who clear their dues before a deadline. You can give them a small discount as a way to appreciate timely payments. You can choose either way as long as you meet your goal of getting payments on time.
5. Understand your Client's Position
It’s possible that your client is not paying you due to some issues on their end. It can be something they are currently facing in their professional or personal lives, which is why they don't have the funds to clear their dues. You don't want to mess up your relationship with a client, especially if the amount in question isn’t significant.
Therefore, if you find that they have a legitimate reason, give them some breathing room. Allow your clients some time to gather funds before paying you off. You can ask your clients to give a specific date when they’ll pay you back.
6. Halt the Work
If the client still doesn’t pay you by the agreed date, you can halt the progress of the work. Then, inform clients that operations for their project will only resume once they pay. Even if they promise to give you more work, you should not continue until you get your payments.
Once the clients clear your dues, you might want to rethink whether you’ll work for them again. It depends on the hassle you had to go through to get your money. So, if the same client offers you work, think twice before making a final decision.
7. Go for a Legal Proceeding
Lastly, if nothing works out and the client is adamant about not paying you money, you can take the matter in a court of law. Many businesses are reluctant to go towards legal options since they take up a lot of time, money, and energy. It is why they prefer to deal with the matter on their own.
Nevertheless, if you can find the services of an attorney in your area that has reasonable fees, you can take their help and send your accounts payables a notice. You don't have to go through the entire process of filing a lawsuit. The threat of legal action should do the job for you.
In addition, you can let your clients know that you will take the matter to small claims court. Small claims court laws may vary from state to state, so you can discuss them with your attorney.
Regular payments help small businesses keep their cycle running. While customer service can help you get your payments on time, you can use the above steps for clients who give you a hard time when paying back.
Additionally, you can adopt the latest technology, such as the digital invoicing app, to ensure your clients receive invoices on time. These innovations enable you to receive payments from clients quickly by making regular follow-ups and many more features.
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