Simple Secrets to Getting Paid Faster

By Rieva Lesonsky

Last week I wrote about e-billing and how it can save you money and save the planet. One of the side benefits of e-billing is that it can also help you get paid faster. I thought this week I’d delve a bit more into ways to get paid faster. After all, getting the cash flowing is every small business owner’s goal, right?  Here are some tips to help you get payment when payment’s due.

Invoice on time. It may sound like a no-brainer, but sometimes business owners get so tied up in delivering the work, they forget to invoice in a timely manner. When you mail the shipment or deliver the completed project, make sure you invoice at that time as well. Using one of the many simple invoicing software products out there, like QuickBooks, can streamline and automate this process.

Make it simple. If your invoice design is busy and confusing, the customer may struggle to find out what is wanted and when. Keep it simple with your logo and a clean, straightforward design. Use bold or red type to highlight the important parts of the invoice, like amount and date due.

Keep it clear. Be sure you and the customer have already determined payment terms and amounts before you invoice. If a customer is surprised or confused by the amount you’re invoicing, that leads to lots of back-and-forth to clarify the issue…and that wastes time.

Target the right person. Find out specifically who in the customer’s organization should receive the invoice, and get the person’s e-mail and mailing address. Especially if you’re dealing with corporate clients, many delays in payment are due to invoices getting shuffled among departments. Before sending the invoice, clarify who receives it and, if sending by e-mail, get a “read receipt” so you know when they opened it.

Make sure your contact information is on the invoice. If the customer has any questions, they should be able to easily figure out whom to contact at your company. Put your company’s name and address, as well as the name, phone number and e-mail of the person who handles your billing, where it’s clearly visible.

Clarify partial payments. In a case where you’re invoicing for a partial payment, such as a deposit or work that’s completed in stages, make sure that the invoice clearly explains this so that the customer isn’t surprised by later invoices.

Offer incentives. If you can afford to do so, consider adding incentives for customers who pay early. Typically, this is a percentage off the total.

Give them choices. Your invoices should clearly state how you accept payments. Offering a range of options–check, credit card, PayPal, money transfer, etc.—improves your chances of getting paid faster.

Follow up. The best-designed invoice in the world won’t help if you don’t follow up immediately on late payers. The day after the payment was due, politely send a friendly reminder e-mail. If you receive no response, escalate to a polite phone call. Most late payments are due to simple oversight and clients will appreciate your follow-through—but if there is a bigger problem, this strategy can enable you to nip it in the bud.

Image by Flickr user Andres Rueda (Creative Commons)

This entry was posted on Friday, February 18th, 2011 at 6:00 am and is filed under Accounting and Taxes, Compliance, sales process, Small Business. You can follow any responses to this entry through the RSS 2.0 feed.


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