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Have you got problems with your customers paying you late or not at all? It’s frustrating….right?! And stressful too. But did you know that a lot of the time this issue happens because customers aren’t too sure about when they need to pay you. So they chuck your invoice on the pile of other invoices to be paid on the 20th of the month, not realising you want it paid immediately (or whenever).
Here are 5 simple steps to getting your customers to pay you on time:
Step 1: Have clear Ts & Cs for your biz
Make sure you have terms and conditions for your business that include how and when your customers need to pay you, and what will happen if they don’t. Click on this linky link to read more about writing Ts & Cs for your biz. Make sure your Ts & Cs are set out so they’re easy to read in a decent sized font with lots of headings. Put a link to your Ts & Cs on the footer of every page of your website.
Step 2: Get your customers to agree to your Ts & Cs first
Before you provide your fabulous goods or services to a customer, get them to read and agree to your Ts & Cs. You can do this by writing something like “Very Important – all customers please read” in bold at the top of your terms and conditions and then get them to agree to them by doing one of these things:
Step 3: Put payment info on your invoices
Make sure your invoices clearly spell out:
Step 4: Ask for payment upfront
Something you might like to think about is asking your customers to pay you upfront. Just imagine it…no debtors! You will need to think about whether this will work for your business. You might first think that this could mean customers won’t want to do business with you, but you’d probably be surprised as many businesses ask for upfront payment these days so it is becoming more of an accepted way of doing business. If this is something you’d like to think about doing, talk to some of your good customers and explain you’re thinking about making this change to your business and ask them for their feedback. Also have a yarn with some other businesses you know that ask for upfront payment and find out from them what works and what doesn’t. If you decide to jump on the upfront payment bandwagon, make sure your Ts & Cs are really clear about how your upfront payment process works so your clients feel comfy with it. If upfront payment doesn’t suit your biz, there are other ways payment terms you could use, like 50% payment upfront and 50% payment on completion, or progress payments.
If upfront payment doesn’t suit your biz, there are other ways payment terms you could use, like 50% payment upfront and 50% payment on completion, or progress payments.
Step 5: Be all over your credit control
If customers know that you keep a close and watchful eye on your overdue accounts, they are much more likely to pay them on time. So a couple of days after an invoice becomes overdue, get on the phone to your customer about their unpaid invoice. Most customers will find these phone calls embarrassing and uncomfortable so they’ll make more of effort to pay you on time in future.
What if I have a customer that still won’t pay?
Click on this linky link to check our blog post about how to deal with a customer who refuses to pay.
Disclaimer: The information on this page is general information only and must not be relied on as legal advice. Legal Beagle is not a law firm or a substitute for a law firm. We are unable to provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defences, options, selection of legal documents or strategies.
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