So how can you achieve a faster payday? Here are some things I do when it comes to invoicing for my clients and for my own company:
INVOICE IMMEDIATELY – Make sure you send invoices out in a timely manner. If possible, collect the payment at the time of contract or at least collect half your payment up front and the other at the time of completion.
LATE PAYMENT SYSTEM – Make sure you have a late payment system in place to collect on your unpaid debt. For example, automatically set up reminder notices a week, two weeks and a month after a late payment. Make sure you include late payment penalties and terms. Unpaid accounts affect your cash flow and ultimately your bottom line.
BE CONSISTENT – Once you send out your invoice, you or your accountant should be consistent about collecting on it. Do the same for every client who is late paying, no matter how long they have been with you.
LIEN NOTICE – Don’t be afraid to use a lien notice to get your client’s attention. This is a tactic tens of thousands of companies take every month. It’s effective and in the end, getting paid is the goal.
COLLECTION AGENCIES – In extreme cases, a collection agency may be your final option before involving an attorney. Before you use a collection agency, make sure you do your due diligence and check the company out. Make sure the company is licensed and insured. You may also want to ask around and find someone reputable who is already working with someone you know.
| Do you have a late payment system in place? |
Getting paid can be a challenge for any small or medium sized business owner, but these tips can help save you some time and tribulations.
As for my client, he now has a system in place, which has significantly cut down on the number of late paying customers. The result is better cash flow and a better bottom line. Try these tactics and hopefully you will get to a faster payday too.
Have a Productive Work Week everyone!