For some businesses collecting payment from clients can be nothing short of a nightmare. There are those clients that seem to be in a rush for an entire project until it comes time for them to pay. A company is put into a strange position as they do not want to tarnish the relationship by being too demanding about getting paid but also want to be paid for the work that was completed. The best thing that any business can do is to have favorable payment terms with a small penalty if the balance is not paid on time. Not only can this generate revenue but it can also put the right amount of pressure on a client to pay on time in order to avoid paying a penalty. Payment terms will be discussed in further depth below as these can be an integral part of being paid faster. The following are key pieces of information that a business will need to get paid in a more rapid way by clients.
Getting together all of the client’s information as well the contact info for the person handling the account is imperative. At times a bill can come through but without the point of contact at the business, their payments department might not authorize payment. These types of delays are common so being as detail-oriented when sending over bills or contracts is imperative. Phone numbers, as well as email addresses, need to be gathered for a client’s customer file. This information should be gathered during the infancy of a business relationship in order to move forward.
Sending over the most detailed invoices possible about the work that has been completed is essential when it comes to getting paid in a timely manner. This can help clarify charges that a client could have questions about which will let to a delay in payment. For those companies that might stick in hidden fees this is going to be difficult as well as unethical. One thing to remember during a project that might take multiple months is to have a payment schedule. If payment is not made the next milestone of the project cannot begin on its work. For those projects that have tight deadlines, this can be the motivation to get payment in ASAP so to not delay the project completion date.
Making payment terms as clear as possible is important as not having this stated can leave it up to the interpretation of the client which can be dangerous. Do not make payment terms up in order to make the client happy but rather terms that are favorable to both parties. Cash flow can be an issue especially if putting up the expenses before the client has paid. Half payment upfront and a half on completion are terms that most companies are willing to accept. Do not accept the first offer for payment terms a company throws out there as in business it is important to never accept the first offer.
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There are huge advantages of accepting payment in a variety of forms. The most traditional would be bank transfer or that of a physical check but some businesses would rather deal electronically. Clients could tell a company that the check is in the mail if they need more time to get the funds together. Cryptocurrency has boomed in recent years causing some businesses to accept this as a form of payment. A company accepting this in 2015 without cashing out would have an immense gain in terms of profits due to Bitcoin’s value dramatically increasing. Incorporate the fees that certain payment options charge and add this percentage to the overall bill. There is no reason that a company should have to cover payment fees through a platform as this will directly impact profit margins.
Getting bank details or having recurring payments can be a perfect way to get paid on time every single time. This can be good for subscriptions or monthly payments for a yearly contract. There are plenty of holidays around the world so this will help avoid delays due to something like Chinese New Year where a large portion of people do not work. Cash flow is important for smaller companies so keeping this healthy throughout the month is far easier. Being able to forecast cash flow by knowing that specific clients are charged during certain days of the month gives stability in terms of cash flow for a business of any size.
Getting paid on time helps keep businesses running at optimum levels so it is important to do. Take the time to make sure your business is getting paid quickly as it can improve a variety of areas of the company!