Depending on the nature of your small business, you may or may not be painfully familiar with the plight of constantly trying to get your clients to pay you on time. For some businesses, like small retail establishments, your clients are your customers and they pay for goods at the time of sale. Simple enough. For a great many other small businesses, however, invoicing and billing can eat up a significant chunk of your attention. Often, clients will pay late, or not at all. And who wants to waste so much time on one aspect of management when you could be, you know, actually doing the job they are supposed to pay you for? For the independently employed and small business owner, it’s a frequent, unpleasant problem to deal with. To try and mitigate problems in this area of your business, try to follow these tips to get your payments coming in more smoothly.
- Have a contract, and make it clear
This is your absolute best safeguard against getting into a confusing tangle with payments. At the beginning of a relationship with a new client, draw up and sign a contract that clearly outlines the terms and timeline for billing and payment. This will ensure that everyone knows up front what the expectations are, and in case anything falls through, you have an airtight legal safety net.
- Bill consistently
If you want your clients to pay you on time, make sure your company sends out bills and invoices at clear, prompt intervals. If you are wishy-washy about how you operate billing from your end, there’s a much greater chance that the people who owe you money will think they can be slack about their end of the deal as well. This also makes your life easier; knowing exactly when you bill clients, and trusting that you were on time with that, will prevent you the hassle of having to dig back and find out how long an invoice has been open.
- Offer online payments
Most business owners would much rather spend their days operating their business – meeting with new clients, working on active projects, and overseeing their employees – rather than going after payments, and processing the ones that come in. Fortunately, there are services out there that make this part of your business easier. Offering your clients a way to pay you online, saving them the time of writing and sending a check, can make getting paid on time much more likely.
- Know a good attorney, and debt collector
No one wants to get litigious over unpaid bills, but from time to time, if a client really refuses to pay, you have to go there. You can’t afford to let clients not pay you – and you definitely can’t afford to get a reputation as a billing pushover. Being prepared for this contingency can make the process easier, so you waste less time on a non-paying client. Have a lawyer (maybe you already have one from other aspects of your business development) at the ready. They are used to these situations, and often, a simple letter from them can get a client to cough up the money. It shows that you aren’t afraid to pursue legal action, without the headache and expense of having to actually do so.
Similarly, finding a reputable debt collection agency is a good idea. Yes, going this route will usually cost you either a percentage of money collected, or a flat fee, but at least you’ll get something.