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3 step process to collect invoice payments faster

3 step process to collect invoice payments faster

Do you have late paying customers? We found that 54% of all customer invoices are paid late. This is a major cash flow drain to your business. Stop playing bank to your customers and get paid faster with this 3 step process.

1) Punish bad behaviour

If breaking rules have no bad consequences, the rule is much less effective. This is why the government (or council) impose parking fines.

The same applies in your business. If you want customers to pay on time, impose a penalty for late payment. Usually, a 2% late fee for every 30 days late will work.

2) Find the bad egg(s)

Identify the customers who are paying late. There are two ways to do this. Go into your accounting software and look up the Aged Receivables Report.

Find the list of customers who are overdue. Sort this list by $ amount owing – focus on invoices that will have the biggest impact to your cash flow.

Or … get proactive. We built a nifty feature in Vistr to show you the number of days for a customer to pay your invoices. Find the people who usually pay late.

3) Give them a customer satisfaction call

Call the client and ask them about the job you did for them. Where they happy with the results?

Make sure you are honest about seeking feedback. You want to build strong customer relationships as well - they might give you more work in the future.

Then remind them of the invoice they have owing, ask them to pay on time (BE POLITE!).

If they were happy with your work, it’s really hard for them to say no to paying you. But if they say that cash is tight, you can propose a payment plan (pay your invoice off in chunks) or work out a deferred date of payment. Be sure to remind them of the late payment fee.

However, if they were not happy with your work, you should ask them what does it take to make them happy, so that they will close out the balance.

Jeremy

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Topics: Invoice