5 Ways for Small Biz Owners to Get Paid Faster
We've written about getting customers to pay their invoice. While getting customers to pay is obviously important, sometimes small businesses may find that getting paid faster is just as important.
Most small businesses have to pay their business expenses on a monthly basis and as a result need to have a steady supply of capital on hand regularly. When customers are late making their payments, businesses can struggle just to stay afloat.
And when customers do finally get around to paying, it may be too late for the business. To avoid such problems, here are five steps that small businesses can take to get paid faster, as reported by Newsday:
- Require Payment Earlier. A pretty obvious solution. If you previously required your customers to pay within 60 days, you may think about shortening to terms to 30 or 45 days. This way, even if your customers are late in making payments, you still have a buffer to make your payments on time.
- Call Delinquent Customers. You don't have to act like a debt collector, but being proactive in collecting invoices can be invaluable. Be friendly and remind customers of the outstanding invoice. Oftentimes, the customer may have simply forgot or gotten lazy.
- Offer Incentives. Customers love a great deal even if that deal involves them actually paying their bills. You could offer an incentive to customers who make early payments such as giving them a small gift or discount.
- Have a Policy In Place. It's hard for your customers to be on time with payments when they are not certain when payments have to be made in the first place. Have a policy in place that states clearly when payments should be made and the penalties for not making the payments.
- Send out Invoices Promptly. If you're late sending out invoices, your customers are more likely going to be late making payments. Give your customers some time to gather resources to make payments by sending your invoices out as early as possible.
Allowing your customers time to pay after receiving your goods or services may be a convenience they appreciate. However, your business doesn't have to suffer as a result. Make sure you use these ways for small businesses to get paid faster. If you have any specific questions, you may want to contact a small business attorney.