Oh the dread… You’ve done an amazing job for a key client over a month ago. They’re usually good for their payment but the invoice you sent has not been paid yet. And it’s a week overdue! Do you chase up your client and risk annoying them? Or do you wait and let your business suffer? It’s a dilemma that is unfortunately all too common in Australia. More than 40% of invoices are paid late. That's a huge amount! Whilst chasing up overdue invoices is not pleasant, it’s important, and there are some simple strategies you can implement to prevent getting paid late.
Discuss terms upfront
This is one of the easiest, and also one of the most effective. In many cases, a lack of communication upfront can be a cause for late payments. When taking on a new job, make sure you discuss the due date and payment options so that your client is clear before work starts.
Offer short payment terms
Whilst this might seem counterintuitive, shorter payment terms actually increase the likelihood of an invoice being paid on time. It's human nature to take something due in a month and add it to the back of your to-do-list. These days it’s very common for businesses to set week long payment terms and statistics show this is the perfect amount of time to get paid on time. Just be conscious that it’s important you discuss the terms before you do the job so that there are no surprises.
Provide multiple payment options
Removing friction in how to pay is very important. Offering limited payment options just creates frustration for your clients and an excuse to not pay you. With Thrive you can make it super easy to get paid on time by offering multiple payment options. By default, customers can pay with BPAY or BSB and Account Number. You can also add the option to get paid online by Debit or Credit card. Finally, you can get access to the Thrive payment terminal to accept payment in person.
Incorporate early payment incentives
An often overlooked mechanism for getting paid early, is to offer an early payment discount. With Thrive, you can set a discount on the total bill if the invoice is paid within a certain timeframe. By communicating this to your client, it will seem like a no brainer for them to pay early. You can also be selective when you do this, and only utilise this option when you have cashflow challenges.
Track invoice email open and read status
Nearly every business owner has heard the ‘missing email’ excuse. With Thrive you can issue an invoice and automatically track when the client has opened and read the email. You can even set up a notification. This information is really helpful as you can actually call or text the client right at the time they have it open.
Resend the invoice
This may seem obvious, but following up via email or phone is sometimes all that is needed to remind a forgetful client that an invoice is due. In most cases, you will likely find an embarrassed customer at the end of the line. With Thrive, you can save time by setting up automated invoice reminders leading up to the due date.
It’s often critical for a small business owner to ensure they have sufficient cashflow so it’s well worth it to open a bank account with Thrive and to get your invoicing set up properly. Having an automated and smart invoicing process can drastically reduce the amount of time you spend collecting your hard-earned money. And that’s got to be great for your business every single day of the week.