Getting Instant Payment for 70 Percent of Your Invoices
Getting paid on time is essential for any business. With late payments becoming more common, it’s crucial to find ways to ensure prompt payment and maintain a healthy cash flow. Here are some strategies to help you get 70 percent of your invoices paid instantly:
1. Clear Payment Terms:
Clearly communicate your payment terms to your clients from the start. Keep them simple and easy to understand. Avoid using complex language that may confuse or delay payment.
2. Online Payment Options:
Offer online payment options to your clients. This not only makes it convenient for them, but it also speeds up the payment process. Various online platforms provide secure and efficient payment solutions.
3. Automated Invoicing:
Automate your invoicing process using accounting software or online invoicing platforms. This ensures that your invoices are sent out promptly and reduces the chance of errors or delays.
4. Set up Payment Reminders:
Send payment reminders to clients a few days before the due date. This gentle nudge can help them stay on top of their payments and prevent overdue invoices.
5. Early Payment Incentives:
Consider offering incentives for early payment, such as a small discount or an extended warranty. This can motivate clients to pay sooner and improve your cash flow.
6. Establish Clear Communication Channels:
Maintain clear communication channels with your clients. Make sure they know how to reach you if they have any questions or concerns about their invoice. Promptly address any issues that may arise.
7. Follow up on Overdue Invoices:
Don’t let overdue invoices pile up. Follow up with clients promptly if a payment is late. Be firm but professional in your communication, and clearly communicate the consequences of non-payment.
By implementing these strategies, you can significantly increase the chances of getting 70 percent of your invoices paid instantly. Remember, prompt payment is crucial for the financial health of your business.
You’ve probably asked yourself: Why don’t my clients pay on time?
Payment delays are often life or death for small businesses. According to a U.S. Bank study, 82 percent of business failures are due to cash flow issues.
So when I spoke with Jevgenijs Novickis, co-founder of Swipe Gateway, who claimed 70 percent of his clients’ invoices are paid on time, I was surprised. He agreed to share actionable tips for small business invoicing.
Why don’t clients pay invoices on time?
For various reasons. Some are busy, some have bad support systems, some genuinely don’t have the money.
The good news is: mostly, the problem is with the invoice. Most people have the money, but lack patience dealing with payments.
How to get clients to pay invoices instantly
Novickis and his team spent years figuring out how to encourage clients to pay on time. These tips are proven to work, and this is how Swipe Gateway attained a 70 percent instant payment rate for their clients.
Unless your invoice recipients have serious cash flow problems themselves, these tips will help you get paid faster every time.
1. Send the invoice right away
Make sure you bill them while the memory of your great service is still fresh.
If possible, send the invoice together with the last deliverable. Sending your invoice early ensures that you get the money sooner, even if your client pays late.
2. Make payment terms shorter
If you need your money in four weeks, make payment terms two weeks. If you need it in two weeks, make the terms one week.
Unless you are working with a big organization with monthly billing cycles, this will still seem reasonable and provide extra time buffer in case they pay late.
3. Make sure you bill bigger clients on their cycle
When starting your partnership, ask your client about their billing cycle. If their accounting department pays bills once a month on the 15th, make sure you invoice them monthly around the 10th.
4. Make your invoice short and clear
An average person receives 116 business emails daily. As soon as your recipient thinks, “This is too hard—I’ll do it later,” you’ve lost them.
Eighty percent of inboxes have between 72 and 21,000 items. If your invoice is not simple enough to process in one to two minutes, their “later” is likely to become “never.”
5. Make it easy to pay on mobile
So, you want your client to pay the invoice right when they open it. More than half of emails are first opened on a mobile device. This means a good invoice will not make them copy-paste information from PDFs, fill out long forms, or deal with special file formats. Ideally, it will be a short link or button saying “Pay here,” like Amazon’s “Buy in one click.”
Another feature that has proven to work well on mobile are SMS invoices. Research suggests that, on average, SMS is more engaging than email. For invoices, SMS is great as there is typically less clutter in recipients’ SMS than email, also there is a stronger tendency to deal with SMS right away.
6. Make sure it is easy to forward
How many invoices were not paid because a busy boss opened the email on their iPhone and forwarded it to accounting without attachment, while deleting their version?
First, your invoice should have been sent to accounting in the first place. Second, it should still be easy to forward.
This means that in addition to the attachment, you should have a link leading to the invoice in your email text. Even if the recipient does not forward the attachment, the link still stays.
7. Charge automatically whenever possible
It is hard to forget a payment that is deducted automatically. Do everything possible to encourage clients that consistently buy the same service to opt for an automatic subscription.
Be sure to incentivize this wherever possible, to encourage clients to opt in. This could mean offering discounts or other relevant perks to your automatic billing subscribers.
8. Send consistent, friendly reminders
Always assume the best about your client, unless proven otherwise.
If they haven’t paid your invoice, assume they simply forgot. Send them a friendly regular reminder, with no more than one to two sentences, until they have paid.
9. Make it easy to ask a question
“I don’t understand this invoice! What is it for?”
Your client may have forgotten about your invoice—and there is no way for your client to find out more if your invoice was sent from a no-reply email address. They will just ignore or delete it as spam and proceed with their business.
So, to make it easier for them, be clear about how to contact you if they have questions.
With these strategies in place, your clients will be able to pay you faster—which will make the job of running your business easier. While Swipe Gateway makes it easy to implement these tips, they are compatible with any system, from custom programming to DIY Word-and-Excel billing.
Together with a solid understanding of cash flow, you’ll be able to avoid common pitfalls and be ahead of the crowd.
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
Welcome to my digital space, where every piece of advice is a step closer to financial clarity and success!