If you’re a small business owner, you’ve been there. You complete a project for a customer and issue your invoice. Time flies by, and the payment deadline comes and goes. Before you know it, they haven’t paid and you’re in a cash flow crunch – not to mention angry and anxious. While you can’t force someone to pay by your due date, you can take steps to get a better outcome from customers who put you in this position. Here’s a look at how to accept business payments, small business payment options, and other tips to help you coordinate the best way to get paid.
1. Give them the benefit of the doubt.
This might surprise you, but it’s important. If you think of your long-term goals with your business, they probably include retaining your customers and growing revenue. In order to achieve both, you need to maintain positive relationships with your customers. But when someone fails to pay on time, it’s very easy to fall into negative thinking, assuming they don’t care about your needs or are trying to avoid payment altogether. With such a mindset, you might approach them more in a more accusatory way than you mean to, which could alienate or offend them.
Try, instead, to ascribe positive intent to your customers. If they’re late in paying you, consider that they or someone in their family may be sick, meaning their priorities have been disrupted. Or, their internet may be down and they’re waiting for a technician to get it working again before they can pay you. Or, maybe they’re in a cash flow crisis themselves. They might have every intention of paying, but their own customer may have paid them late and now they’re tight on cash. The takeaway? More often than not, your customer will intend to pay. Life happens, though, so give them the benefit of the doubt and you’ll be more likely to treat them kindly and preserve the relationship.
2. Offer a variety of convenient payment methods.
One reason customers may not pay on time is simply because you don’t accept a variety of small business payment options. If you’re asking them to use a check or cash, this alone can hold up payment. They’ll either need to have checks on hand, which many people don’t anymore, or order some. Or, they’ll need to take time to go to an ATM and then deliver the cash to you.
So if you want to be paid on time, make it easy for them. Use a digital payments solution that allows your customers to pay you with all major credit cards, ACH transfers, and payment processors, and you’ll see on-time payments increase.
3. Make sure they received your invoice.
Another cause of missed payments can be as innocent as a missed email. We all have crowded inboxes today, and the same is true for your customers. If you send an invoice via email and your customer doesn’t pay on time, there’s a good chance they didn’t see it in the first place. In order to prevent this, send your invoice as an email and ask them to confirm receipt. You can then send the invoice via SMS, if your technology allows it, as a second way to ensure they’ve received it.
4. Gently follow up.
If a customer is still not paying when they’re supposed to, it’s time to follow up. But, following up directly can put you as the business owner in an awkward position. Instead, let your digital payments solution handle this part for you. With Finli, for instance, we have a follow-up service feature embedded in our technology. We’ll automatically send two emails and then place a phone call in the first few days after a missed email to confirm the customer has the invoice. The messages are polite, and let the customer know their payment is due while buffering you from having to track the invoices or have those difficult conversations yourself.
5. Change payment terms next time.
Still struggling to get a customer to pay on time? You might need to switch up your approach the next time around. While every service business is different, it’s perfectly reasonable for most to ask for a 25%-50% deposit upfront for a job. If someone historically hasn’t paid on time, this would be a great time to use such terms. Doing so can help you get the funds you need to cover your time and materials without running into cash flow problems that can arise from chronically late payments.
Try Finli, the mobile-friendly solution to all of these challenges and more with a 30-day free trial. By combining professional invoices via text or email with multiple payment options, invoice follow-up, and text or email client communication tools, Finli was designed to help your business grow.
Need help getting started? Finli was founded to help small businesses instantly invoice, collect immediate payments, and more seamlessly handle their accounts receivable. Sign up for a free trial here!