You've done the work, now it's time to get paid! Are your invoices encouraging your clients to pay quickly and on time? Your invoice is part of your customer's experience with your business and doing it well will encourage them to pay you faster.
It's important to be paid quickly – a good payment turnaround can benefit your business because strong cash flow lets you pay your bills, capitalize on opportunities, and remain stable. It all starts with invoicing. Here are our invoicing tips and guide on how to get paid quickly.
Include a Due Date
You shouldn’t think of your invoice due
date as optional. Clients absolutely need a reminder of when the invoice is due
whenever they look at it, or there’s no real motivation to go and pay it. You
should also think carefully about the terms of your invoice. If your industry
standard is 60 or even 90 days, you may want to buck the trend with something
more reasonable, such as 30 or 15 days. These terms help you get paid faster
and help you get on missing payments faster, too.
Also, keep your due dates consistent so
your clients understand when they should pay.
Create a Self-Service Portal
Mailing or hand delivering invoices is
outdated, and even emailing them creates the opportunity for them to get buried
or land in someone's spam box. Try a self-service portal instead that offers
payment methods to customers. Deliver the invoice through the portal, so that
your customer is immediately able to pay the moment that they get the invoice.
Choose a portal with lots of payment options,
or you will discourage your customers from using it.
Direct Your Invoice Properly
Sometimes your point of contact in the
company is not the best person to send the invoice to. When you start working
with a client, ask them who should receive the invoice. Often, you’ll have a
dedicated contact in accounting who should get all of your invoices. This can
save you time, as you won’t be relying on your contact to send your invoice to
the right person. That extra step can actually add a lot of time if your
contact is busy.
Offer Early Pay Discounts
If it is affordable for your business, offering
a small discount for early payment can really help you get paid faster. Try
offering a two percent discount for payment before the 15-day mark, or even
earlier. Customers who want to take advantage of this discount will often pay
the moment they get their invoice. That can save you a tremendous amount of
time and work in collecting the invoice.
Don’t offer too much of a discount, or a
discount for common pay terms like 30, 60, or 90 days. Those who pay exactly
on-time should be motivated by late fees. Use a discount only to encourage the
fastest turnaround possible, or you may simply be losing money without getting
enough benefit.
Are you still struggling to get paid
quickly, even when using these best practices? You can get paid even faster and
have a healthier cash flow with invoice factoring! At J D Factors, we pay you
as soon as you send your invoice, which can have huge benefits to your business.
Reach out to learn more about factoring today.
