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How to make Collecting Money Easier from your customers

Making money is the easy part of running any business.

If you are good at what you do and you have an effective marketing strategy the work will roll in!

The difficult part for many business owners is collecting money that is due; here are a few tips that could help any business:

1. Agree payment terms up front

It’s very easy to get carried away at the start of a project with a new client, and be eager to impress and show off your skills, that you agree to start work before letting them know your payments terms.

2. Make sure your invoice is prompt and contains all required information.

Send the invoice the minute the job is complete, do not wait until the end of the month, get that invoice sent immediately.

3. Make the due date more prominent.

Make sure that the due date on your invoice is clearly visible, and more prominent than the rest of the text on the invoice. Do not offer any more credit than is necessary, the job is complete so why not render the invoice for immediate payment?

4. Include your payments details – all of them.

Be as flexible as you can with payment methods, and include all your details. Encourage payment by BACS or debit card.

5. Itemise your invoices.

Giving vague descriptions of the services you have provided will make it easy for the client to query the invoice and delay payment, whereas providing a detailed breakdown of the work carried out will remind the client and anyone within their organisation exactly what is being invoiced for. It’s also a requirement if you are charging VAT.

6. Email a copy to your client.

Posting invoices will take time, and will allow the client to make excuses about not receiving the invoice or misplacing it. Make sure that you email a copy of the invoice to the client as soon as the invoice is produced.

Sending a copy of the invoice by both email and post is the ideal solution, as the client will hopefully have already read and verified your invoice when they receive your email, and the copy in the post will act as a reminder to pay. It also makes it much harder for them to try and wriggle out of paying.

7. Thank your client.

This should accompany the invoice along the lines of ‘Thank you for you custom, if you have any questions please let us know’.

8. Send reminders.

Always send reminders when an invoice goes overdue, or even leading up to the due date. Make sure the reminders are written in a friendly tone and remain professional. Rather than asking for the client to pay the invoice, try asking for an anticipated payment date or ask if there is anything you can do to help, such as set up a payment plan to help with their cash flow.

Try sending a reminder three days before the due date if no payment has been received, the day after the due date and then once per week after that. Follow up reminders for overdue invoices with a polite phone call to check that the client is happy with the services provided and has received the invoice.

9. Stay calm.

Clients who consistently pay late can be infuriating, however getting angry or making threats rarely helps. It may get them to settle their invoice, but will guarantee you lose out on any future work from them. Becoming personal with lines such as “I need payment so I can…feed my family/pay the rent/pay my tax bill” are also a big mistake.

10. Thank your client again.

Always let the client know once you have received payment and thank them again for their business.

These are just a few of the many strategies that can be employed to speed up the money collection process. To sum up it is very important that you have a clear process for you and your staff to follow.

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