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PAYMENT / INVOICING
HOW TO GET PAID ON TIME One of the hardest things for any business is getting invoices paid on time. You work hard for your clients to provide them with a valuable service, and then spend months chasing your money. The truth is, many business to business invoices get put on the back burner, because there is often little consequence to paying late. We’ve compiled a list of useful advice to help you get paid sooner.
Make your payment policies clear up front. At some point, your client must agree to your offer to supply goods or services and the price for the item they want. It’s essential that your payment policies are stated clearly on the contract, estimate or sales order confirmation they consent to.
Accept every payment type including credit cards. With credit card payments you can always be paid in timely fashion even if the client doesn't have the funds when ordering. Shop around for a merchant account provider and set up credit card processing for your business.
Get a deposit in advance. Depending on the value of the job and the time it takes to deliver many firms get 12 | www.theedgewirral.co.uk
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money in advance, and then collect some more midway through the job with the balance on completion. Usually, this is 30% in advance, 30% after an agreed landmark and the balance upon completion. It’s important to make sure that "completion" means on the day you deliver the finished product.
Let your customer pay up front if they offer. It’s surprising how many business owners shoot themselves in the foot by not accepting payment when it's offered. Many times, a client will ask, "Do you need a cheque now?" and the business owner says, "No, that's okay, we'll get it at the end." Don't do this! If the customer is happy to pay up front – say yes please and thank you!
Make arrangements for payment before you deliver the product. Make it clear to customers that they will need to pay you when you deliver the finished job. It is not unprofessional for you to do so, it lets them know that you are a professional accustomed to being paid for your work in a timely fashion. Just say something like: "Hey, Mr. Jones, I have your job ready to deliver. I’ll be round to drop it off at 3pm. Could you have a cheque ready for me. The balance due is £300.”
Follow up every day until you receive your money. Obviously, you should try to get paid before this need arises. If a client realises your payment policies are lax, they are more likely to opportunistically attempt to exploit it every time. For this reason it is essential that you continue to chase every late payment until it is paid. Every minute that you are working to get paid is a minute that you are working a second time for money you've already earned and also a minute you are not working on your current job.
Late payment charges. Printing a warning on the bottom of your invoices is fine, but if you fail to follow it up, you won't ever be taken seriously. The law allows for businesses to charge late payers interest on outstanding balance at the rate of 8% above base plus debt recovery charges of between £40 and £100 can be charged if debts are not settled within 30 days of invoicing.urgent. Even if it's your spouse, who uses her maiden name to make the calls - in this way, your amiable relationship with the client is not jeopardized.