How To Make Sure You Get Paid On Time? What Can You Can Do To Overcome Problem With Late Payments.


How To Make Sure You Get Paid On Time? What Can You Can Do To Overcome Problem With Late Payments.

It has become common for small business owners to receive payments later than the stipulated time period. It is really disappointing for entrepreneurs as they struggle to maintain their cash flow. In many instances, owners have borrowed money and have to pay interest, but they still keep prices low in order to remain competitive.

How To Make Sure You Get Paid On Time? What Can You Can Do To Overcome Problem With Late Payments.

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Thus it hurts them financially to not receive their due payments on time. Many businesses have failed due to problems with payments as customers make payments in parts. This happens when the first installment they pay is paid at the end of the stipulated time period. It is not hard to imagine the difficulties the small business owner has, as he fails to keep his own commitments to raw material suppliers and his employees. Sometimes, his day to day operations are affected causing production to come down, and in some instances, the business comes to a standstill.

If you are such a small business owner facing payment problems with your customers, there are ways to encourage prompt payment upon presentation of an invoice. Let us look at some of the ways you can use to overcome this problem with late payments.

Send The Invoice Along With The Order

In many instances, fault lies with the small business owner. This is because it has been seen that some owners send invoices separately after the product has been supplied. In some cases, this delay, which is often unintentional, can stretch to up to 7-10 days. If the customer makes payment accordingly, he is not to be blamed. Given this, make it a rule to send the invoice on time, along with the product. Keep a register and maintain it so that you send the invoice as soon as you have completed the order.

Talk About Payments In Advance

Although it may look odd, it is better to clarify beforehand when you expect your invoices to be paid rather than feel disappointed later on. If your invoices are printed, make sure to get the terms of payment clearly printed in bold and also talk to the customer about your policy. When you are prompt in your delivery, it is your right to receive payments on time.

Ask For Advance Payments

Some small business owners feel it is insulting to ask for advance payments and out of courtesy they do not even mention it. But believe me, if you make it a policy to ask for advance payments, which you may fix as a percentage of the total amount of the invoice, you will find that the remaining amount will always come in on time.

Send Emails

If you have a standing order for which payment has not been made and a new order has been placed, it is prudent to mention about the previous outstanding balance in a courteous email. At the back of their minds, all customers know that they have to make an outstanding payment and they will promptly make it when they receive an email from you.

Set An Example Yourself

There is no point in blaming your customers for late payments when you are guilty of making late payments to your suppliers or to your own employees. Set this habit right and make your payments on time. This will give you the moral courage to ask for your own payment when the due date arrives.

Set A Process In Motion

It is no use panicking when payments do not arrive on time. Have a backup plan and use it whenever you are facing such a situation. Make a courtesy call, send an employee, send emails, do whatever you can to keep reminding the customer about the payment he has to make. If payment still does not come, you can issue stern warnings and also take legal action.

Make Use of SMS

This is an effective method for reminding defaulters of their obligation. If you keep texting customers every now and then, your customers will eventually get fed up and make the due payment.

Use Incentives

If your profit margin allows, give a discount of a few percentage points, if the payment is made within the time period mentioned on the invoice. At the same time, charge interest on late payments.

How To Make Sure You Get Paid On Time? What Can You Can Do To Overcome Problem With Late Payments.

Business Running Costs Template | Business Running At A Loss | Business Running Costs | Business Running Errands For Elderly | Business Running Out Of Cash | Business Running Costs Examples | Business Running Costs Calculator | Business Running Cost Spreadsheet

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