Ah, the invoice: a document that has evolved over the years from the humble handwritten sales slip to an electronic document, routinely sent via email. But even digital invoicing on the Web is in a constant state of change. If you think you know all there is to know about the prospect, think again. If you are getting paid late – two weeks, a month, even a quarter after the bill is due – then this article is for you.
To help you get paid in a more timely fashion, here are six tips designed to help you do just that – get your invoices paid in full, on time, every time. Let’s dive right in!
1. Accept all payment types
Would you rather get paid by check, PayPal, or bank transfer? How about not at all? You will want to make sure that, in your invoices, you list all of the payment types your business accepts. Sometimes, business owners omit one payment type or another (checks take time to process; PayPal has its fees), but, frankly, that’s a bad idea.
Some customers simply prefer one payment method over another. Being flexible here, by offering more options, gives you more opportunities to get paid! And that, friends, is what it is all about, right?
If word gets around that your business does not take a popular payment type (like PayPal), it can actually hurt on the sales side of things, well before you get to the invoicing phase. So you might say there’s every reason in the world to accept all of the most popular types of payments!
2. Offer an incentive to pay early
Rather than tacking on interest or late payment fees for people who don’t take care of invoices in a timely manner, why not provide them with an impetus to get it done sooner rather than later? If your pricing model permits it, consider offering a 5% discount applied to bills paid on time (whether net 15, net 30, or any other interval).
You can also try the approach of increasing the amount due at certain intervals. After net 30, add 2%; after 45 days, increase the charge to 5%. You get the picture. (Always be sure that you’re charging interest on monies owed in accordance with the law of the land, of course).
3. Be consistent
Treat each customer the same. If you ask net 15 of one customer, ask the same of all. If one customer incurs a late fee after seven days of non-payment, the same penalty should apply to all others. The worst thing that can happen is that one customer finds out that you are holding them to a different standard than other customers. That’s a sure way to lose business. Be consistent with billing and you won’t have to worry about making one customer feel they have been treated unfairly.
This, of course, means being consistent, even to your friends. Buddy discounts and friendly exceptions have ran many businesses into the ground. Do not let that happen to yours. If you do the work or provide the goods, expect to get paid; regardless of with whom you are doing business.
Bonus Tip: Make all of the terms clear to your customers from day one. You will run into fewer payment problems, and avoid certain potential legal troubles.
4. Follow up
If a payment is late do not hesitate to follow up. Sometimes good customers just need a kind reminder. Keep it courteous and only send reminders on a set schedule. The idea is not to hammer your customers to the point of annoyance, rather, it is to get paid – consistently – with every invoice. Don’t let forgetfulness be the cause why you didn’t make the month, the quarter, or even the year. Send out friendly reminders early and often.
5. Show some gratitude
There is nothing less personal than receiving a cold, seemingly demanding invoice. Maintain customer relationships by being grateful. Simply adding a few lines, somewhere in the invoice, that read “thank you for your purchase” will go a long way towards making your customers feel appreciated.
Bonus Tip: Don’t say “thank you for your patronage.” That just sounds overly formal and, frankly, patronizing. Avoid it at all costs and seek genuine relationships with your customers. Telling them – before payment is tendered – that you appreciate them helps you get paid, simply put.
No one wants to hand over funds to a cold, unfriendly, and uncaring company. Set yours apart from those types of businesses by being grateful and uncompromisingly courteous, up front.
6. Use an invoice template
Still don’t know the best practices? Choose from a wide range of online invoice templates to get your invoices started in the right direction. You can use an existing template by simply filling in the blanks with your business’ info, or create a derivative invoice that will uniquely suit your business based on the template. From a template like the ones in the link above you can create a nearly infinite number of invoices, send, and track them, all with the ease of email.
The big difference
By implementing the above tips, the difference you will see in your invoicing routine is a whole lot more payments received. And that’s the kind of change we can all live with!