finance articles businesses business management business marketing Technologies finance accounting Industrial Manufacturing starting a small business Investment health information

Surefire tips to make sure your customers will pay on time

paying23246187.jpgTired of waiting 60-90 days for your customers to make their payments? If you are tired of waiting, there are some things you can do to make sure your customers are paying on time.

Invoice in a timely manner
The second you take an order, send out the invoice. Getting the invoice to your customers soon after the order will ensure that they will pay it sooner. Getting people to pay in a timely manner will be hard if you wait too long to send out the invoice to them. A lot of companies will send out the invoice with the order as it is a simple reminder to your customers to pay their bills as soon as possible. Then you will want to send out the invoice about a week after the item was shipped as a reminder to pay their bill. You need to be very clear with your invoicing so your customers know they need to pay their invoices soon or they will be charged interest on the past due amount after 30 days.

Never extend credit to new customers
A lot of companies make a critical error and that is extending credit to customers that they don't know. If you have a first-time customer to your company, how will you be able to ensure they are paying their bills? Be careful about these new customers and only extend credit to the customers that you have dealt with for awhile and you know will actually pay their bills. Always do a credit check on your customers because individuals with bad spending habits can take advantage of credit and it can literally destroy your cash flow.

Ask for deposits
You need to start asking your customers to make deposits on their account at the time of purchase. Since some of your services may range in the hundreds of thousands of dollars, most of your customers probably cannot pay the entire amount at once. By asking them to deposit a good amount up front like 20-50% of the total invoice amount, you can at least break even for your deposit into the products and then you can worry about the excess cash you need to collect.

Multiple Payment Options

A great way to get your customers to pay their bills is by offering them different payment options. Try to accept all of the major credit cards, especially those that your customers prefer to use. Offering payment options like check, cash, and credit cards will really help your customers to make their payment as they will be able to see that you accept just about every type of payment.

Be clear
In order to help your customers pay on time, be upfront and clear about your payment terms and invoicing options. Have your payment terms on the invoice and make sure they are visible to the customers. Include the Due Date in bold and in larger font from the rest of the invoice information so the customer knows they need to pay by that date or face a penalty. You must also include the way in which you will calculate the interest on their account if they do not pay it by the due date. Another way to get your customers to pay is to place a note on the invoice that you will give them a reward for paying early. Small discounts on future orders can motivate customers to make timely payments as they know they will get a nice discount in the future.

Follow Up Procedures
If a customer misses a payment, have a system in place as to how you will contact them and how soon you will contact them. Staying up with your customers is a great way to keep on top of your accounts receivables so you know you will be able to collect the money you are owed.

FREE: Get More Leads!
How To Get More LeadsSubscribe to our free newsletter and get our "How To Get More Leads" course free via email. Just enter your first name and email address below to subscribe.
First Name *
Email *


Get More Business Info
Sponsored Links
Recent Articles

Categories

Copyright 2003-2020 by BusinessKnowledgeSource.com - All Rights Reserved
Privacy Policy, Terms of Use