As a company that helps more than 250,000 businesses invoice their clients every day, we’ve observed a simple truth: some business owners are getting paid on time while others don’t. Unfortunately for many, it’s the latter.
The art of getting paid is a balancing act for many small-business owners. On one hand, you want to keep your customers happy and not put pressure on them to make payments. On the other hand, you need to get paid for your service to continue the great work that you do. To hit that sweet spot, it’s essential that you avoid some simple mistakes that may be holding you back.
If you bypass these mistakes, you’ll find yourself on the positive side of the payments equation.
Mistake 1: Not including all the important details
It may sound obvious, but including the correct details on invoices is an absolute must when it comes to getting paid. Valuable time is lost when you have to go back and forth with the customer over confusing terms and line items on your invoice. A good tip is to add detailed line items to your invoices that show where your time was spent and what purchases you made (including receipts as needed). Try to avoid industry jargon where possible, and speak to your customer in their language. If there are unexpected expenses that need to be discussed, raise them with your customer ahead of time. No one likes to receive a surprise expense, out of the blue.
Mistake 2: Taking your time to send the invoice
You’d be surprised how many business owners are always on time when it comes to services but then take a week or more to send the invoice over. This leads to a big delay in getting paid and it’s a very simple mistake to avoid. Send your invoice to your customer as soon as you finish a job, to ensure they have the opportunity to pay right away. Making use of mobile apps like ours will ensure you can create and send invoices from wherever you happen to be.
Mistake 3: Not communicating the value of paying by debit or credit card
Receiving payments by card has immediate cashflow benefits for your business, which include spending less time chasing down money and getting paid faster. If you don’t spell out the benefits for your customers, you may be missing an opportunity to take greater control of your cashflow. Educate yourself on the core benefits of credit and debit card payments and relay this to your customers. By showing them that a credit or debit card payment is easy, quick and safe, you’ll give them an easy way to pay quickly, whilst taking control of your cashflow in the process.
Mistake 4: Not enforcing policies around late payments
As the business owner and provider of a service, it’s totally acceptable to enforce policies around late payments, to ensure your customers understand the importance of prompt and full payments. If you don’t show your customers that there are limits around how long you’re willing to wait for payment, you risk being taken advantage of. Whether it’s a small late fee or simply sending a reminder email, it’s important to set standards early. This ensures you avoid being stuck in a situation where you’re constantly chasing payments, wasting valuable time, and potentially damaging relationships in the process.
Chris Strode, Founder, www.invoice.2go.com
