As a small business owner, you rely on your clients paying you promptly and accurately. But all too often, you can find yourself chasing up payments or receiving the incorrect amount. For the clients, this money is often nothing more than spare change, but for a struggling entrepreneur it can mean the difference between success and failure.
It is simply not fair that you have worked hard to produce amazing results for a client, only to have to fight to be compensated for your diligence. So how can you, as a small business owner, ensure you are paid correctly and on time? Here are a few tips to help you protect your finances.
Agree clear payment terms
When you start working with a new client, or take on a new job, it’s important to ensure that a contract is signed by both parties. This document will outline that you will be paid a specific amount for completing a particular job. Make sure the contract outlines the timeframe in which payment must be completed. This makes it much easier to chase payment after the work is completed, as you have written evidence that they have read and agreed to the terms and conditions.
You could even specify methods for enforcing payment terms if the money is not sent within the agreed time period. This could involve charging interest on late payment, reporting them to relevant industry authorities, or even taking legal action.
Offer multiple payment options
Giving a client choice when it comes to payment, means they can pick the method that is most convenient and practical for them. They prefer certain digital payment platforms, such as Stripe, Paypal, or Worldpay. Alternatively, they may prefer the more traditional method of direct bank transfer. This range of options will increase the likelihood that you will be paid on time, and give them less of an excuse to delay.
Take upfront payment
If you are really worried about not receiving your due, you could opt to request payment upfront. This might be the full amount, or simply a deposit in advance of the job. This way, you will ensure you have money in your bank account, while also setting important boundaries for your customer.
Use invoice software
An invoice software allows you to create, manage, and send invoices on the go with ease. This means you can simply request payment from clients even if you are traveling or away from your office. These solutions are scalable, meaning your software package can grow with your business to meet your payment needs. Invoice software can be automated, minimising payment time and reducing the likelihood of delay. Although they come with a monthly subscription fee, invoice software packages will ultimately improve your business cash flow and help your company to thrive in the long run.
By following the aforementioned tips, you will ensure that clients pay you correctly and on time. This will help you to maintain your relationships with your customers, while keeping your finances in good shape.