Customers who don’t pay on time are a real pain in the neck. They don’t do what they’re meant to and it can put a massive bind on your business. Getting your customers to pay on time is the best way to solve this issue, but how do you do it?
If you want to know how to manage payments more effectively and get customers to cough up the cash quickly, there are a couple of different things you should know. Here are four tips for making sure customers pay with ease.
- Invoice Promptly and Correctly
It stands to reason that if you want to make customers pay on time, you need to make sure that you are invoicing them promptly and correctly every time. A proper invoice needs to be put together and sent out in advance of the payment date. This helps to mitigate the issue of small businesses not making payments on time. Proper invoices also help to establish you as an industry expert, rather than just another small business. That helps quite a bit from a psychological perspective for customers – they think you’re big, so they treat you better
- Switch to Direct Debit
When it comes to invoicing, you might use something like PayPal or another type of method. Ultimately, all these do is leave you open to having things get slowed down and delayed in a big way. Instead, switch to direct debit for paying invoices. It means that there are no fees, no waiting, and the quickest form of payment.
- Charging Interest
When you want to make sure that your business stays afloat without having to take out a business loan, the best thing that you can do is to charge interest on your payments as a form of incentive. The interest payment encourages people to start paying sooner rather than later, which means that invoices come in on time
- Consider Invoice Finance
If you’re a small business and your lifeblood is impacted a little too much by late payments, you might consider invoice finance as a solution. Invoice finance is a fairly straightforward process. You give your invoice to a third party, who gives you some money for it, like a deposit. Then, when the whole invoice is paid, you get the rest of it back, usually minus the fee. It keeps a sturdy cash flow going into your business, which is good.
An invoice finance facility is a finance facility provided by an invoice finance provider to help business owners leverage their unpaid invoices in order to provide an instant cash injection into the business. The lender will release up to 90% of a business’s invoices straight away. On payment of the invoice from their customers, the lender will release the final amount minus any fees and charges. There are different types of invoice financing options available to businesses depending on the situation and the level of control they require in collecting unpaid invoices.
If you would like to find out more about invoice finance, and how it can help you manage your late payments, get in contact with Funding Bay. We work with a panel of over 200 lenders, including Ultimate Finance, Nucleus, or Funding Circle, all of whom provide a wide variety of invoice finance products. These include selective invoice finance, confidential invoice discounting, or invoice factoring.
Get in contact with Funding Bay and we can set up a consultation with you.
