It can be frustrating not getting paid on time, especially when you have bills to maintain and staff to pay. Whether you are self-employed, a freelancer or a larger company, late payments from clients and customers can cause issues. If this is happening persistently it can impact business development and cause cash flow issues, so how can you resolve it? Here are some quick tips on solving your late payment problems.
Provide More Options to Pay
Gone are the days that cash or cheque were the only methods to receive payment as well as standing orders set up through your bank. These days, there are a wealth of ways to transfer money, many of which are very simple to use and can send the money within a matter of hours, sometimes quicker. In the same way you can access 24/7 loans that transfer cash quickly in an emergency, you can use the FinTech advancements to your benefit and get payments fast too. By providing your customers with the ability to pay by mobile payments, secure cash transfers and even cryptocurrency, you can get paid on the same day.
Maintain Good Communication
Communication is key with your customers, especially when it comes to money. If you have set clear expectations to do with payment, then you can avoid any confusion over payment dates, amounts and methods of payment. This ties closely with invoicing correctly and needs to have a set plan in place. If you need to remind your customers of an upcoming due payment, you can set up email reminders or messages to ensure they cannot forget. If a payment is missed or late, this needs to be chased promptly so that it does not become a habit and can be resolved quickly. If this can be done by reinforcing urgency, it will communicate that the expectation is on-time payment. Otherwise, the habit will continue and can escalate quickly.
Offer an Incentive to Pay Quickly
One tactic that can work effectively is offering an incentive to pay sooner than the payment due date. This can be as simple as offering money off, a percentage off their next purchase, or a gift as thanks for prompt payment. There are several ways to incentivise payment and can help resolve issues with late payers by offering something in return. What you choose as an incentive needs to be carefully considered, especially if it involves the client or customer paying less. You do not want to be offering too large a discount as even though you will be paid earlier, if everyone is paying less, you could cause cash flow issues.
Seek Financial Advice
If you have persistent overdue payment issues and have tried many different methods already, it is always a good idea to seek advice. Late payments are to be expected sometimes as unforeseen circumstances can happen to anyone, but if there are ongoing issues every month despite incentives and more methods to pay, you will need to go further. Speaking to a financial advisor can help, as well as to industry regulators as it will help define the next steps to take. Ideally, it will not have to go as far as involving recovery agencies, but if missed payments begin to mount, it could be a viable option.