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As a business owner, you know that one of the most vital parts of running a successful business is having the right amount of cash flow coming in from your clients or customers. But for many businesses, they might not get the money they’re due as soon as they’ve provided their product or service. In situations such as these, it’s important that you’re able to get the payment you’re due as soon as possible. However, this can often be easier said than done. So to help ensure that you’re able to get the money coming in that your business needs, here are three tips for encouraging your customers or clients to pay their bills on time.
Set Clear Payment Terms From The Beginning
Before you can expect for your customers to get their payments in on time, you first have to stipulate the terms of any payments that need to be made. According to John Rampton, a contributor to Intuit Quickbooks, you should have written agreements signed by all your customers or clients outlining what the terms of payment are. This should include things like deadlines for payments, fees for late payments, and any other terms that you think essential to include. Once everyone knows exactly what’s going on and what’s expected, it’s then up to you to give reminders and up to your clients to get their payments in as the terms dictate.
Make It Worth Their While To Pay Quickly
Depending on how you set up the terms for payment with your customers or clients, they might have anywhere from a few days or a few months to get their payments in. But when you’re waiting on their payments to pay your employees or vendors, it can be very important to you to get those payments as quickly as you can. To encourage this, John Rampton, a contributor to Entrepreneur.com, advises that you consider giving small incentives for payments taken care of quickly. This could include a future discount on an order, a free gift, or something else specific to your business.
Send Invoices Persistently
Sending an invoice is one of the best things you can do as a reminder to your customers or clients that they have a payment due. To sooner you’re able to get the invoice sent out, the sooner your customer or client will know what they owe you. And if you don’t get the payment in a timely manner, Sammi Caramela, a contributor to Business News Daily, suggests that you be persistent with sending another invoice or reminder so you can keep this balance in the forefront of their mind.
If you’ve been having a hard time getting your customers or clients to settle their bills on time, consider using the tips mentioned above to help address these issues.