Do you know there is something all business owners agree on? Well, it is getting prompt payments from customers. Timely payments facilitate the smooth functioning of business, let you stay cash positive, and help you pay your team members on time.
Many organizations have invested in online payment processing software to access faster payments and automated their invoicing processes. But, some organizations still struggle to understand how to accept payments via online payment software.
Well, making that transition can be a bit difficult, but it will surely be worthwhile in the long run. However, we must not forget that paper-based accounting is also one of the big reasons for late payments.
Besides, they create gaps in your cash flow, can add to operational issues, and make you lose focus from more important tasks. However, collecting client payments and reducing instances of overdue payments is a common practice. The average small business has about $5,000 in outstanding fees every month.
But, what can you do as a small business owner to get clients to pay faster? Well, the first thing is to try out free accounting software for business. The second thing you can do is follow these 10 tips to streamline your billing process and collect payments on time. But, before we move on to the tips and strategies, let us know more about online billing software.
What is online billing software?
Online invoicing software lets you generate bills for your products and services. You can set the parameters you need in every invoice, add your logos, and customize it according to your needs. It also lets you add taxes, discounts (if necessary), and other charges as well. In addition, you can integrate it with chat platforms and email automation tools to streamline client communication and serve them better.
Besides, if you are still thinking about how to accept payments via online payment software, you can take a free trial of an online billing solution and then make the final decision. Here are some things an online payment processing software can help you achieve.
- Minimize late payments by sending out automated payment reminders.
- It helps you achieve 360- degree visibility of your finances and track missing payments
- Build a professional image by providing personalized services.
- Automate billing for recurring payments
- Helping you focus on other issues and managing the end-to-end billing process.
1. Invoice promptly
To get your payments faster, you need to invoice your clients promptly. While this is given, you must not forget that your customers will expect your invoice and pay you upfront. Invoicing as soon as possible makes you look professional and sets a precedent for your customers.
At the same time, late invoices leave an impression that you are not bothered about your payments, leading to non-payment. You must remember that your clients cannot pay an invoice if you have not sent it. One way to get sure shot payments is to follow up and send a friendly payment reminder.
2. Avoid disputes with estimates
If your client is not in agreement with your invoice or, in the worst-case charges, a lawsuit, there will be a delay in payment. Moreover, it will also put you in an awkward situation and permanently damage your client’s relationship.
You can reduce these instances by submitting a thorough estimate before you start with the project. The estimates should contain all the information as your invoices do. These include deadlines, payment terms, prices, and other agreements.
Somehow, if you can get these numbers in your customer’ heads, they will not be in shock when they receive your invoice. Online payment processing software can help you have direct conversations, handle disputes and even provide the clients with documents they need.
3. Leave no scope of confusion
While you can easily collect payments on time with accounting software, make sure you mention the date and payment terms at the top of your invoice. This way, your clients will be able to see them and take prompt action. Besides, make sure your invoice describes your products and services in the best possible manner. For example, you can include dates on which work was done and delivered and other relevant parameters.
Using free accounting software for business as compared to paper and mill will let you follow up quickly and automate the process. Besides, these solutions let you manage all invoices and bills easily in one place. You can easily make customized invoices and send them with a payment link to your customers via web, email, or text.
4. Have clear payment terms
Having clear payment terms and the time frame you expect your payment is a must. It will act as a starting point for all conversations, and you can follow- up with them easily. Moreover, it will also help you charge late fees or interest if need be.
While thirty days is the usual time frame, some customers might be willing to pay you faster if you provide a credit card option. Furthermore, if you plan to charge a late fee or interest, make sure you mention it clearly. Also, make sure you mention the date from which interest will start accruing.
5. Experiment with bill payments and schedules
While this may not completely eliminate the issues of delayed payments, one of the best ways to get faster payments is to charge in advance. You can even choose to charge half or a certain percentage of your amount to ensure that your work doesn’t suffer due to a lack of funds.
While this may seem like a task, your free accounting software for business will help you achieve it in just a few clicks. Besides, when there are no issues related to finances, you are more likely to put your 200% on the project. Another idea is to set project milestones. This means you work on the next stage of the project when a portion of your payment is released.
Wish to experiment more?
You can give out discounts for early payments if your clients pay you within a week or before 30 days. But, be careful you don’t give too many discounts. A 3-5% discount is enough to grab your customer’s attention and without unnecessarily raising their expectations. These will reduce the risk of outstanding payments, and you will be able to easily manage them through your online billing software.
6. Provide multiple payment options
Your free accounting software for business has the ability to integrate multiple payment gateways. So, if you wish to get faster payments, you must let your customers pay with a credit card and other digital payment modes. Most businesses accept major cards like American Express, Visa, and MasterCard.
Payment technology is changing, and so is online payment processing software. With automatic payment methods gaining acceptance, adopting them will increase your chances of getting paid and, in turn, help you stay cash positive.
7. Have a solid follow up process
When you have clear payment terms in place, half the battle is when. If an invoice is delayed, you can consider sending a payment reminder or make a phone call. If you are using an online payment processing software, you can automate the process as you deem fit.
Not only will this help you save time, but this will also help you solve the problems before it escalates into a bigger issue. For example, a phone call might be ideal if you are not getting responses to your emails. This will help you clarify things in real-time and will build a strong bond with your client.
But, if these issues continue for several months, you will need to strategize and establish more communication channels. For example, you can send meeting invites, make additional calls, or resend your invoice again. Whatever process you follow, make sure you stick to it.
8. Withhold your services
Well, client payment and services go hand in hand. They need your services as much as you need your payments. If you are stuck with a client that regularly falters on payments, be firm and withhold your services or the products you are supposed to deliver.
You can even send an email and refuse to take up new works till the payment, or some amount is released. It would help if you can set up this expectation beforehand so that it doesn’t come as a surprise at a later stage.
9. Contact a debt collection agency
While an online billing software will let you send automated payment reminders, you are likely to get no results in some cases. So, if months have passed and you are tired of sending payment requests, you may want to try out a debt collection agency.
While this should be your last step, please remember that the agency can burn a hole in your pocket and charge up to 30% or more on your invoice. Moreover, taking this step will put an end to your relationship with your client. But, it may be required if no other means is working.
10. Manage client relationships
Well, building customer relationships is one of the common yet trickiest parts of collecting payments on time. You might want to consider extending your payment timelines if you have long-term clients. But, make sure this doesn’t damage your ability to get more leads and business opportunities. The best part is to trust your instincts and keep things professional at all times.
Moreover, if your customers are not able to fulfill your payments, remember this is a temporary situation, and there will be many clients in the future. One thing you can do is to keep an open invitation for your clients and keep them in your sales pipeline. It can take three months or even three years, but they will remember the positive experience they had with you and even recommend new clients to you.
Moreover, some payment situations require a little empathy. So, if you can make a plan for a client or help them find a viable solution, they are more likely to treat you as a partner. Irrespective of the fact, if you work as an independent contractor or freelancer, these things will help you build customer trust and make your business more successful in the long run.
Luckily, you can manage customer relations and collect payments on time with accounting software. When you use it to its full potential, you are sure to stay miles ahead of competitors and manage your finances.
Building solid customer relationships, having clear payment terms, invoicing promptly, and getting creative with your invoices are just a few things you can do with your free accounting software for business. Not only will it help you get payments faster, but it will also help you streamline your finances and gain a solid competitive edge.
If you are also looking for the perfect online payment processing software, we will be happy to assist you. You can call us at +1-805-491-9393 or send us a mail at email@example.com.