Taming Your Clients To Pay On Time

Services rendered require due compensation. You do your part, promptly, and you expect your client to do his, in the same timely fashion. Payments that either come late or not at all result in a nightmare for small business or a thorn in one’s shoe for big ones. Either way, tardiness with regards to billing isn’t something to take lightly; it can very well spell disaster for your business venture. Here are a few ways you can speed up the payment process, improve your methods, and add to your arsenal of prompt and effective billing.

Respond to all the clients’ emails, requests, and other communications in a timely fashion.

It’s likely that if you treat them as professionally as you can, they too will do the same. Start on the right foot and follow through ‘til the end. Be polite; it never helps to lose one’s head and this only makes further interaction more stressful. Further, make sure your contract spells out your payment terms very clearly. Prompt billing means that you establish a payment schedule and that you stick to it; it also means that you find out in advance if your client has specific billing or accounting needs. Manage your invoices, keep track of their aging, and follow up on late ones regularly.

Include a small discount for payment within a 24-hour period.

Entice your client with a bit of a bonus if they pay early. A five to ten percent discount is an attractive incentive and as for yourself, you will spend less time worrying and more time on important endeavors (such as billing other, more stubborn clients).

You can include late fees for payments after 1 or 2 weeks.

Include a provision in your contract that will charge interest on overdue accounts. Don’t charge too much –some States have a limit on how much you can charge –and keep the client informed of this up front, in the contract and in your invoices.

If your client transactions require contracts, they should include a scheduled payment plan.

Oral contracts are legally binding but they are harder to prove. Get it in writing and discuss an evenhanded payment schedule. In this, include your specific task to be completed and/or delivered and the due date of the payment. Client-defined target dates can delay their payments indefinitely, especially if they word their schedule payment thus, “Payment to coincide with the opening of the store.”

Once you’ve established all of these, it doesn’t mean that the client will do all the work and pay you at the appointed date. Always confirm if they’ve received the invoices, follow up, and stick to the norms of courtesy. If and when they do pay up, a thank-you note definitely won’t hurt for as they say: take care of your business relationships and they will, in turn, take care of you.