Turn your worst paying client into your best paying customer
This informative article will cover how to turn your worst paying client into your best paying customer. There is nothing more awkward and frustrating than chasing up a late payment or an overdue invoice. For small businesses, however, this can be a common occurrence. If you’re having trouble with invoices or credit management, there are a few tricks of the trade to turn your worst paying client into your best paying customer.
Here are some quick tips to make late payments a thing of the past and to get your clients paying invoices on time, every time they’re issued.
Maintain a better relationship with clients
It’s beneficial to both parties to maintain a good client relationship. This will help to develop mutual trust and respect. You will also build a better reputation for your business and get good word of mouth as a result. Clients like to feel like they mean more to you than just money so try not to see them as a number. Develop a closer working relationship with your clients. Be open and transparent at all times, especially about your fees.
Get technology to work for you
Consider investing in the latest invoicing software and apps. This will automate the payment process. You can set reminders to go out automatically as well. Cloud-based software is the best as you, your staff, and clients can access any necessary billing information in real-time. You can send automated messages about an overdue invoice or late payment. This is especially convenient if you’re dealing with a larger number of clients. In order to scale your business, you need to rely on technology.
Be clear about late payment fees
Make a point about late payment fees and ensure your client has understood. This way they won’t be able to claim they weren’t informed about the possibility of being charged for an overdue invoice. Be transparent and clear about all payments and have this information in a written contract to back you up from the start.
Arrange a regular payment schedule
It’s better to try to send invoices on the same date as this will help clients remember. Be consistent with your invoices and ensure the customer is aware of the dates of all payments. It depends on the type of service you offer for the timeframe you set but use a logical payment schedule. For example, always invoice on the last day of the month. Learn more about late payment invoicing with this article.
Charge monthly rather than by the hour
In order to avoid disputes with customers, charging a flat monthly fee is often easier than charging hourly. This way they can’t argue about the amount of time you’re spending on the project. Instead, they’ll have a clearer idea of how much you’re going to charge from the get-go and will be able to budget for this.
Always send invoices on time
If you send invoices late, how can you expect your clients to pay on time? Using an invoicing app will help you to schedule invoices even if you’re dealing with a lot of clients. Try to avoid sending invoices late at all costs as this will make you appear less professional. Credit management is much easier if you’re organised about it from the start.
Consider upfront payments
If you’re concerned a client isn’t going to pay you for your work on time then you could consider taking payments upfront. You could even charge before you deliver the work. The best way to do this while maintaining a good client relationship is by keeping your clients up to date with your progress. Make sure you show them a draft or a plan ahead of time to avoid a late payment. You can then invoice them before you send your final project. Again, this all depends on the type of business you run.
Break down bills
Rather than charging hefty payments consider smaller more regular payments. If you’re concerned about your client not being able to afford your services, then a huge bill could result in an overdue invoice. Break down bills into more manageable chunks and invoice your clients at logical milestones in the project along the way.
Consider offering a payment plan
If you do encounter any issues with an overdue invoice or late payment then you could consider a payment plan for your customer to pay off the debt. You can incorporate your late fees into this as a percentage of the overall cost. It’s a good idea to have this set up early on. A payment plan isn’t always the best option for you to get your money on time, but it will make it easier for your client to pay you. Try to get regular smaller payments before having to resort to this.
Don’t be afraid to charge late fees
As long as you’ve clearly outlined late fees in the contract and made sure your client is aware of them then there’s no reason why you shouldn’t charge them. Don’t just use them as an empty threat. If your client isn’t paying invoices on time then this is only going to cost you money and possibly even cause downtime for your business. Enforcing late fees is a strong incentive to encourage clients to pay on time. Again, ideally, this will be the last resort as if you develop a good relationship with your client from the beginning you should be able to get them to pay on time.
Even the best client relationships can result in a late payment or any overdue invoice. It’s always advisable to be as organised as possible and have a contingency plan in place. Hopefully, by being a transparent and reliable professional, you’ll receive the same attitude in return. You can reach out to even the worst paying client. Credit management and invoices can sometimes be a bit of a headache for small businesses, but if you follow these tips you could turn your worst paying client into your best customer.
If you would like further advice about how to deal with an overdue invoice or late payment, find out more with this amazing article about how to deal with late paying customers.