5 Tips to Get Paid Faster in Your Business

Historically, getting paid on time—if at all—has been a challenge for service-based small business owners. It's exhausting to constantly follow up with  clients for late payments, especially if it means you have to cover any of the expenses that may turn up. The bottom line is that cash is your company's lifeline, and it helps you to satisfy your responsibilities in a timely manner. Here are five tips to get you paid faster in your business:

1. Increase down payments: Increasing the down payment involves your client paying more money before your business provides the service they require.. A lower outstanding debt suggests a lower risk of payment failure if the payment is received late or not at all. The opposite extreme of this strategy is to request payment in full as an advance payment, thereby denying credit terms.
   
   
2. Allow digital payments: Enabling your customers to make online payments via credit card, bank transfer or otherwise means that you are more likely to get paid. Digital payments are also a great way to track your cash flow. Since the payments will be reflected in your bank statements, it will be easier to reconcile your accounts and this information will come in handy for tax time.
   
   
3. Charge a late fee: Although charging a late fee may be considered harsh, it is an effective way to motivate clients to pay you on time for your services. Make sure to inform your existing and potential consumers about the charge. Always make sure your consumers are aware of these terms in your contract and invoice terms & conditions/notes.
   
   
4. Use the ‘Send Reminders’ Feature in Your Accounting System: Set up automated emails to remind your consumers when it's time to pay or when a payment is past due. Some accounting solutions enable you to send professional payment reminder emails to your customers that are automatically scheduled after an invoice is sent. Alternatively, some accounting solutions also allow you to set up automatic payments where you can add your customers’ credit card information and they are automatically charged whenever their invoice becomes due. Therefore, you get paid on time.
   
   
5. Early payment discount: Offering a discount for early payment benefits both the customer and the business owner. The buyer receives a discount, and the business owner receives payment sooner! The disadvantage is that you must ensure that you can afford the discount and that it does not deplete your profit!
   
   
6. Bonus Tip - Cater for Non-payment/Late payment - Make sure the business isn't entirely reliant on timely payment. Ensure that additional funds are due  to arrive simultaneously, so that even if the payment is late, you will still be able to continue.

While you have no control over what your client does in the end, there are steps you can take to ensure your success. Customers who pay late are a danger to your business and livelihood, therefore, you must enforce the tips shared above to ensure that you get paid on time, all the time!