At the very beginning of your business journey, you must have quietly thought to yourself: if only I could somehow manage signing up clients, the rest would be a breeze. Then, clients started flooding your way, your reputation soon preceded your cold calls, and you no longer had to send out emails to potential prospects just to get your business on the map.
As joyful as this transition may have been retrospectively, you now understand that the hurdle of getting clients is certainly not the greatest one a business needs to deal with in its lifetime. In fact, the more you start working with different people, you find out that getting them to actually pay for your goods or services is even more of a challenge than getting them interested to begin with.
Although the struggle of finding work will always be real, you also need to find ways and develop strategies that will help you maintain strong and transparent relationships with your existing clientele. Not only for the sake of their satisfaction, but also for the sake of your sanity and your business stability, financial and otherwise. To help you meander through these murky waters, here are a few tried and tested methods to ensure your clients pay every invoice, preferably in time.
Asking for an advance is common practice
Too often, clients are extremely busy, in the middle of their own turmoil, going after their own clients who are late to pay, and often unaware of the time and effort you’ve invested to deliver what they’ve hired you for. If you’re in the business of creating stunning e-commerce websites, you know that clients often don’t know and even more frequently don’t want to know the intricacies of backend developing and frontend design that goes into that smooth landing page for each product they sell. Let’s not even get into writing appealing copy or optimizing images.
Unfortunately, the end product for them might seem all too effortless, so they prolong their payment while they focus on driving sales on their new site. That is precisely why most modern-day companies that rely on regular client payments actually insist on advances. They add them to contracts as one of those key prerequisites for a collaboration to take place. Try it for yourself and see how it pans out. Maybe this will help you keep your business running smoothly until you receive the rest of the payment, or they’ll at the very least be able to appreciate your work more and learn to pay in time.
Automate the invoicing process
How you invoice your clients may very well be the source of trouble and the cause for late payments, or the complete lack of payments altogether. In fact, the moment you take control of your invoicing process, the better your chances will be to get paid for your work in full, and in time. Implementing invoice financing is a simple, but effective way to improve your invoicing strategy, support your cash flow and prevent issues.
Simply put, this method allows a third party to cover the majority of your outstanding invoice until your clients pay up, so that you can maintain your business without any setbacks. Automating invoices also helps you keep a regular schedule and maintain structure in your payment cycles, so that you give each client enough time to cover their payment.
Ironclad contracts matter
Clients will often shower you with attention when they need changes made to your original product or service provided, when they’d like to ask you about any additional features, but you’ll encounter crickets as soon as the question of invoicing pops up. Defining your communication patterns and channels upfront is one of the most reliable ways to ensure that your clients cannot, at least from a legal standpoint, afford not to reply to your emails in a timely manner.
Flexible payment methods, a variety of payment providers, and ensuring that they can pay in installments as well as apply discounts when needed are all fair ways to help your clients cover their bill in time. However, no matter how much you go out of your way to accommodate them, they need to be aware of their responsibility, and preferably in writing. From the moment you start negotiating collaborating with a new client, and before you provide your service, do include detailed descriptions of how payments should be made and how you will pursue any late payments during your collaboration.
Know when to cut your losses
Sometimes, you should give your clients some leeway. Flexibility is the foundation for many long-term collaborations, and showing that you understand their troubles is indeed a great way to earn future referral business. However, sometimes clients just aren’t worthy of your time and effort and they might end up costing you more than they bring you success and stability. In such situations, you need to recognize the moment when it’s time to cut ties with that particular client.
Of course, to make sure that you’re legally protected and that you can indeed stop providing your service to that particular client, make sure that your contract has a clause that specifies the conditions under which you can exit the collaboration. Sometimes, late payment fees, advances, and all of your pleading to the CEO might come to no avail, so it could be best to find new clients.
Slow-paying and no-paying clients can be quite a burden to any business. Take your time to devise a clear road forward for your own business to get paid in time, and in full, and you’ll ensure that your company has a stable future in your industry for years to come.