What to Do When Clients Don't Pay in a Timely Manner

What to Do When Clients Don’t Pay in a Timely Manner

As a business owner, you probably already know you have some clients who diligently pay you on time or before the money is due. However, you also have those who pay at their leisure. Sometimes that means you wait for quite some time before you receive your money. So, what can you do, especially if you don’t want to sever your relationship with the client? Here are some #BTYTips that can help you collect payments without hurting the relationships you’ve developed with your clients.

Get to the Right Person

In many cases, the company’s owner is responsible for paying employees and contractors ensure the payroll is done properly. Sometimes, though, a payroll clerk may be in charge of payroll. Therefore, if you’re not talking to the person who actually handles accounts payable, your non-payment issue may get pushed aside. Keep in mind that you might need to call.

Invoice Your Client on Time

While this seems trivial, clients expect an invoice from you after they receive the product or service. If you wait to invoice them, you show them urgency isn’t a priority. Plus, as a general rule, you have a greater chance of getting paid sooner when the client knows they owe you money.

Make Sure They Received the Email

Inquire if the client received the invoice email. You could have made a careless mistake and sent the email to the wrong address, or the message might have never left your outbox.

Make sure that your inquiry email is friendly and non-confrontational.

Send a Friendly Reminder

It’s easy for emails to get read and forgotten. Therefore, you should let the client know they have an outstanding balance and nicely inquire when they plan to make the payment. You want to be kind but direct so there’s no question what you expect from the client.

Make sure you remain non-threatening. You’ve probably heard the expression, “You catch more flies with honey than you do with vinegar.” Well, there’s a good reason for it.

Make Sure You Communicate Effectively

As you’re sending invoices and emails to your client, be sure to communicate effectively. One way to accomplish this is to use an online tool that can reduce PDF file size. This will make them easier to send in an email.

Make sure you use the right file compression tool so the document retains its quality. In particular, the images, font, and structure will remain the same with a high-grade program.

Preventing Late Payments

Once you receive payment — and as a general rule to prevent late payments in the future — draft a contract to hold the client accountable. The contract should include the date you expect a payment, the terms, and any termination stipulations.

Additionally, you can reduce late payments by giving clients discounts for paying early.

Use Invoicing Software

With API products like Plaid Balance, you can verify immediately if a client has the funds for your services or products. You’ll be confident your client is able to cover the payment you require. And they’ll be reassured knowing they have the money to pay, which means they won’t accrue an overage fee.

Take Actionable Steps to Encourage Client Payment

When you’re professional and nice, you’ll be more likely to receive payment. It also helps to have the right programs to assist.

You can have more small business tips and best practices dropped in your inbox. We guarantee we never sell… yadda, yadda, disclaimer. You can also join the conversation by joining the BTY Small Business Facebook Group.

Thanks for reading!