Some customers can have difficulty paying their invoices on time. When you come across such customers while doing business with them, there are a few things that you can do to help with collection. You can also take steps to ensure that this doesn’t happen in the future.
The importance of reminders
Make sure your invoices mention the due date in a clear way. As the date approaches, set up a system to send out reminders automatically. Email tends to be better because it is easily accessible on mobile phones at all times. In order to make paying easier, include a “Pay Now” button within the body of the message.
Offer a choice of payment methods
Often, clients make their payments late, simply because the payment options available are not convenient to them. In addition to conventional payment methods, offering your clients different digital payment methods can make it easier for them. From credit cards and debit cards to peer to-peer-payment, make sure that your clients have a half-dozen different alternatives available.
Make sure that you have different notification options
When you first deal with each client, make sure that you can contact them in multiple ways; phone, text message, and email, among others. Ask for the client’s permission to be contacted in these ways, as the deadline approaches make use of them. You can even set up a messaging chatbot to send out automated messages about missed payments or late payments. It’s also possible to ask your clients to opt in for notifications that show on their phones as the date approaches.
Whatever you do, don’t overwhelm your clients with reminders. It’s important to keep your reminders to a reasonable level.
Pay attention to the way your invoice is designed
Check your invoice to see that it is easy to understand. Is it easy to find and read the due date and the amount due? Typically, these items are printed in red to indicate urgency. You should also make sure that any information about penalties or interest for late payments is clearly indicated.
Your invoices should detail in legible print what kind of penalties there are for late payment and when they will be imposed.
Efficiently administer your accounts receivable
Unpaid customer invoices can halt a business in its tracks. Don’t wait to send out invoices at the end of a monthly cycle; instead send them out whenever a project or sale gets completed. Likewise, for any overdue accounts, be sure that you are sending out timely statements and friendly follow-up reminders to get the attention of the customer.
Many growing companies find themselves facing a cash flow gap waiting for customers to pay their invoices 30, 60, and even 90 days. Business owners who turn to invoice factoring for immediate access to capital have found this a fast and easy solution to bridge the gap between invoice and payment. When you sell your invoices to a factoring company, they now collect payment from your customers for the invoices you factor alleviating one more administrative task.
If your clients seem to not take their due dates seriously, encourage them pay before the due date, and not wait till the last moment. You can also ask them to set up automatic payments with their bank so that they never miss a due date. If you are able to offer discounts for clients who make automatic payments, make sure you inform them of this when you set up their account.
Most clients who owe businesses money have every intention of paying you, but are unable to do so for various reasons. When you take these reasons into consideration you may be able to approach your unpaid bills in an organized way.
Your Questions Answered Quickly
Whether your business is thriving and you can’t keep up, or you are waiting on clients to pay their invoices, Universal Funding can help your growing company. Call us at 800.405.6035 or complete our rate form today to learn more about invoice factoring and how it can improve your company’s cash flow.
About Universal Funding
Universal Funding is a private funding source that has funded thousands of businesses and more than $2 billion since 1998. We turn your accounts receivable into the funding you need through invoice factoring and can have capital in your hands in a matter of days.