A situation in which all customers pay their invoices and debts on time is good but is rare. If it happens, your cash flow would be hundred percent as predicted, and it would allow you to make your business decision promptly. Also, it would allow you to pay your expenses on time.  

But the reality is different.  Many business owners will struggle to have their invoices paid. In some cases, customers may even fail to pay overdue invoices. It results in a cash gap that requires you to find alternative sources of finances to fill the gaps. 

But all is not lost. There are ways you can handle late payments without damaging the good relationship you enjoy with your debtors. It ensures that your resources are not tied up in receivables and that you meet your operating expenses without a challenge. 

Chasing customers to pay the invoices is awkward and time-wasting. But sometimes, you will need to do it to keep your business afloat. So it would be best if you lay out a strategy to ensure that you get paid on time but still maintain your valuable customer.  Here are tips to help you get your debtors to pay their debts on time.

1. Contact Your Clients Regularly

The best way to ensure that invoices are paid on time is to make it a habit to talk to your client even when they do not owe. This way, you will find it easier to contact them after sending the invoice.  

If someone else pays the invoice on behalf of your client, ensure to befriend them so that it becomes easier to request them to pay invoices without becoming overly rude. 

2. Set Your Terms At The Beginning

Once you convert a lead into a customer, set the terms straight. Ensure to let your customers know when payment is due and the consequences of not paying invoices within the stipulated period. Also, grab this opportunity to set your terms. For instance, you may demand a 50% payment to collect the product and settle the balance in 30 days.  

Let them know that there is a late payment fee if they cannot pay their bill on time. For instance, a pending bill should attract a 5% fee if paid within 30 days but will incur an additional 5 % if the payment is made outside 30 days. 

3. Invoice the Client Once You Complete the Job

As soon as you complete the task, ensure to send your invoice so that it becomes part of the client’s accounts payable.  You will also be paid if a client receives the invoice on time. Thus, after a few days, ensure to send an email to confirm if payment plans are ongoing. 

4. Call or Write An Email When Payment Is Late

Late payments and delays can make it difficult to restock or meet your daily expenses. Ensure to make a follow-up as soon as it is past the payment date. You may also call your debtors a few days before the payment date is due so that they can make payments and avoid the extra charges.

Conclusion

Handling delayed payments can be hectic,  especially for startups and customers who make it a habit.  However,  it must be included in your business plan, because it’s quite common. With the steps provided in this article,  we hope that you’ll be able to request for payment and keep all your clients.

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