June 7, 2015
One of the biggest problems for startups and small businesses is late payments.
When a company is starting out, capital is stretched thin. Prompt payment is indeed essential to the smooth running of any business, but especially for those still finding their feet.
There are some simple ways in which a business can encourage efficient payment.
Cloud-based document distribution and online options make paying easy
One of the most effective ways to ensure a swift payment from clients is to make the process easy. Sites like PayPal opt for simplicity, allowing for easy setup and transfers which translates into a service where paying a bill is only a click away.
Document distribution specialists Netsend state that using cloud-based invoicing technology increases productivity and efficiency through enabling a low cost set-up, improved cash flow and reduction in labor.
In the busy life of SMEs sometimes things may be overlooked. Cloud-based technologies also lets you keep on top of sending your invoices. Use systems like Xero to keep an eye on your incomings and outgoings and never miss sending out an invoice.
Effort in design can pay off quickly
If an invoice looks more interesting than your everyday bill then it will generate more positive feelings toward payment. Color can even be used to encourage quicker payment. For example, blue is said to be the most trustworthy color, hence why many social media moguls use it for their branding.
Orange can also be a useful color as many people associate it with good value, partially because it has been used in the branding of many value for money businesses. Think about your branding and how you can create an invoice that works with your brand to become aesthetically pleasing and interesting.
However, try not to get too carried away. A visually busy and difficult to read invoice will only irritate people. You want your invoice to be clean, simple and effective – so use color and images subtly.
Know what to include
Although it may generate a groan from clients upon opening it, state that the document is an invoice at the top. Also ensure there is a unique identification number present on the document alongside your company name, address, and contact details.
Clearly state the amount owed and ways to pay as well as information pertaining to when the service that they are paying for was carried out and any fees that may be added on.
Manners cost nothing
The best way to get paid is to be polite. Use friendly language that thanks your client for their business. That being said, don’t be so polite as to not remind a client who has not responded that their payment is due.
The quicker you chase up late payments the better. Send a gentle reminder the day after payment is due if they have failed to complete the transaction. After that if they continue not to pay you will need to take further action.
But even in such a situation as a late paying client, remain professional and polite, obvious anger will often slow down the process. With that in mind, always say please and thank you – they are effective words and will cost you nothing, which is something any business will appreciate.
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