Get Paid Faster from Clients? When a client takes their time paying a small business, it creates enormous stress on the business owner who is probably already behind.
Get Paid Faster. Asking for money from slow-paying clients can be tricky. We want them to keep doing business with us but we also want to pay our bills.
We can all trade war stories on how hard it is to get paid by clients and how frustrated it makes us. I certainly understand. I also know that we, sometimes, are a part of the problem as well. Here are some tips for avoiding late payments so that you can get paid faster.
1. Set up auto payments directly to your bank account.
If it’s a major corporation, you can literally get paid faster by five times by connecting your bank account to their payment system. Ask the client if they can connect you with the proper department to set up. This usually involves filling out a couple of forms.
2. Send an invoice to the client AND the assistant.
You need to befriend the assistant but the invoice that you send to the assistant will probably have better legs than the one that you send to the contact which will probably gather dust on the desk. Get paid faster by IMMEDIATELY sending the invoice once the order is placed and verifying they got it.
Some clients will tell you ”Send me the invoice NOW” and we often ignore the request because we want to start working on the project or something else. Truth be told, we should adhere to their request. This means they are ready to sign it. They are telling us that because it is foremost in their minds at the time and they are ready to submit it. Once a couple of hours pass they get bombarded with other stuff.
3. Become friendly with the assistant
They take a lot of crap all day. Treat them like they are important and even send them an occasional gift (Starbucks card, Barnes and Noble card, etc). The assistant is directly connected to your contact and serves as a great backup when you don’t want to bombard your client with calls about your past-due invoices.
4. Follow up with the Accounts Payable Department the next week!
Most of us wait for 30 days or after a couple of weeks just to be told: “We have not gotten the invoice.” As you all know this is so frustrating but when you think about it, it could have been avoided if you had followed up the first week to make sure it had been handed over to Accounts Payable to get paid faster.
5. Don’t be intimidated to call the client when too much time has passed
This is often very hard, you don’t want to bug them because you want repeat business…however, you have to have faith in your abilities and realize you will get more clients but you MUST respect your business and get paid faster to run it. Your client gets paid like clockwork every 2 weeks so asking you to wait longer is already an inconvenience. More than 30 days warrants a call. You can make it a matter of fact but be firm and friendly at the same time. Don”t tell them your personal business or that you are desperate, that’s none of their business.
6. Offer a discount if they can pay in advance…
Look at it like this, would you rather be paid less now or the full amount much later when all your bill collectors have added fees to your past balances and you are borrowing money from family members and friends to buy groceries and you are totally stressed out? If you get LESS> pay NOW you also have the time, energy, and motivation to move on and to garner new business stress-free!
7. Don’t Turn Away business!
Look at it like this, there are some people who can’t afford to pay your premium prices…but do you still have bills to pay? An att0rney friend of mine gave me the worst advice once. He told me to set my price and never waive. I did for the first half of this year and I can’t tell you how many thousands of dollars I lost because I turned down independent companies etc.
Truth be told, in this economy, that extra money can go a LONG way when things get tight and your major clients are taking too long to pay you. Also, the extra money can really add up to an interest-bearing ING account, groceries, bills, insurance, gas… etc. The ADDED benefit of these smaller accounts is you can ask to be paid UPFRONT as part of the discount.
NEVER give credit to a company (small or independent) that you have never worked with. Also, get a PayPal account and a debit card with it. I can’t tell you how much I LOVE PayPal. Let me add.. don’t let independent clients take advantage of you either. That’s another coming story.
8. Don’t be afraid to solicit new business…and have a “Sale”
It really works, when your money is tight and you are having a hard time collecting.. why not offer 1/3 off or specials for new clients (no more than that) … retailers do it ALL THE TIME from Walmart to Saks, EVERYBODY has a sale when things are slow. Why not you? Make sure you make it with a time limit like for the month of June or “For the next two weeks.”
Also, make the potential client feel special. I learned a long time ago there is no need to announce it to my entire database… just follow up with those people who have expressed an interest in the past. In addition, the smaller clients want to feel special too. If everyone knows what they paid… you get the picture.
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9. Pull Away Sometimes
How many times have you driven yourself insane for a late-paying client and the check comes as soon as you stop thinking about it?
The stress of maintaining a business and collections for a black entrepreneur can be EXTREMELY overwhelming. Ironically, all of my friends are also black entrepreneurs. I didn’t intentionally seek them out we came across each other. We all agree that running your own business is a never-ending hustle… but you HAVE to give yourself a break and enjoy the fruits of your labor.
Get a massage, have a day where you treat yourself to a nice restaurant for lunch or dinner, play golf, go swimming do something that will take you out of the stress for a minute and when you come back you will feel invigorated and ready to get back into the grind. Shit, take a NAP if you have to that works too.
10. Stop Complaining…
Have you ever given any thought to the fact that EVERYONE is a potential new client in some shape, form, or fashion? They may not be related in any way to your clients but they may KNOW someone who is. Moaning and groaning will not get you ANYWHERE but more stressed out. It’s OK to talk to other Entrepreneurs but CERTAINLY not clients about your business problems.