Getting Customers to Pay Faster

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Are you spending too much time following up on unpaid invoices?

 

It is common for businesses to spend an excessive amount of time trying to collect what they are owed. This not only takes up time, but it can also lead to cash flow problems.

 

So, how can you get your clients to pay faster? Here are a few tips to help you out:

 

  • Request an upfront payment or deposit

An agreement to pay half the bill at the beginning of the project and the other half after completion is a sign of good faith. This will help improve cash flow and “educate” your clients.

 

  • Shorten the cycle

Establish interim payments to link the billing cycles to specific project deliverables. As each item is finished, you can send the corresponding invoice. This can help make heftier bills more manageable for your clients.

 

  • Incentives

Offer a discount for early payments! An early or on-time payment discount compels people to stop their outstanding invoices from aging.

 

  • Be flexible with your payment methods

Expand the list of accepted payment methods to include more modern options, such as PayPal, direct bank transfers, and e-checks. These methods tend to be quick, safe and easy.

 

  • Automate invoices and reminders

Even the most organized managers can let invoices fall through the cracks. Automate the process through invoicing software: the invoice will reach the client more quickly, and you will save on paper and mail expenses. These solutions could also include payment reminders, and they can help you keep track of your invoices and accounts receivable.

 

  • Be polite with your invoice language

Adding lines like “Thank you for your business” and “We appreciate your timely payment” positively reinforces the relationship you have with your clients.

 

Keeping a good working relationship with your customers is essential. Strive to build mutual trust and respect. When you have that connection, clients will be more likely to pay promptly.

 

Remember, another way to promote a healthier cash flow for your business is through financing and leasing your commercial equipment. Nonetheless, if you succeed at cutting you Average Account Receivable Aging in half, your increased cashflow will allow you to pay interest-bearing loans quicker.

 

Want more information? Contact CEFI now! Call (787) 302-2334, email us at info@cefipr.com.

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