If you’re having trouble getting invoices paid by your customers, you’re not alone. A 2015 study from Fundbox found that 64 percent of small businesses are affected by late payments.
This puts business owners between a rock and a hard place. It’s frustrating to spend hours following up on past-due invoices, but it’s even worse to hold off on hiring, upgrading equipment or paying your vendors because of a cash-flow pinch. Still, client relationships can be fragile. Repeated phone calls and late fees don’t always go over well with the people who hire you.
Predictable revenue keeps you focused on the task of running and growing your business. Simply put, positive cash-flow keeps the wheels greased. Here are a few ways to make sure you get paid as quickly as possible for your hard work.
1. Accept All Forms of Payment
The easier it is for your customers to pay, the more likely they are to pay on time.
Paper checks, for example, may seem like a thing of the past, but according to a survey by the Association of Financial Professionals in 2014, businesses within the U.S. still pay half their bills by check. According to the Wall Street Journal, “That’s down from 74% in 2007, but the rate of decline has slowed, suggesting stubborn barriers to change.”
Clearly list your company’s name and mailing address on your invoices. If you don’t have an office, list a P.O. box or your home address. Make it impossible to misinterpret where checks should be sent and when they’re due.
Credit and debit cards
Credit and debit cards are easy to use and therefore a form of payment that will help you get paid on time. Some of the best and most popular merchant credit card processing services include:
- QuickBooks Payments. Email invoices with a “Pay Now” button and your customer can pay you with a couple clicks by credit card. Simple, fast, and easy. Plus your accounting will be automatically done for you. Same rates for all major credit cards (2.9% + $.25 for an invoice paid online).
- Square allows the processing of credit or debit cards in-person or digitally. Plus, you can auto-import sales and expenses in QuickBooks using the Sync with Square app.
ACH Bank Transfers
ACH bank transfers are often the cheapest and easiest way to move money. QuickBooks offers free ACH transfers, meaning customers can deposit funds directly in your checking account with no fees.
This is especially helpful option for customers that you work with on an ongoing basis. Just setup the account and routing numbers once, then collect 100% of the money you’re owed.
It’s easy to pay and receive payments with Paypal, and it only takes a few minutes to get started. The receiver—i.e. the invoicer—is responsible for the fee of 30 cents plus 2.9 percent on every transaction. (Remember, these fees can deducted as a business expense.)
On top of this, PayPal and QuickBooks sync beautifully together so you can offer customers this payment option without creating additional bookkeeping.
TechCrunch estimates that 70 percent of U.S. consumers will make a mobile payment in 2017. Businesses are sure follow suit and so the ability to accept mobile payments is becoming a priority. To get started accepting payments via mobile, check out some of these popular apps that sync with other payment processing services.
- Samsung Pay
- Apple Pay
- Venmo Share Payments
- Facebook Messenger Payments
Be flexible, look for options that keep your bookkeeping straightforward and don’t forget to write off the transaction fees associated with digital payments.
2. Create Accurate, Easy-to-Understand Invoices
When your revenue relies heavily on getting those invoices paid, it’s worth investing a little time in making them as clear as possible. Even the slightest ambiguity will slow things down. As Finnish professor Osmo A. Wiio famously said of human communication, “If [it] can fail, it will.”