How To Get Customers To Pay Bills
A common problem for small businesses is getting their customers to pay bills. More particularly, many businesses struggle to get their customers to pay on time. The following ideas may help:-
- Do not accept business from just anyone. Monitor your potential customers. The ASIC website will provide company extracts for a small fee or you could do a credit check using a commercial provider to find out about any bad history.
- Get specific details about your customers. You need more than their brand names. Always send invoices using legal trading names. Should it arise, courts only recognise current legal trading names. Keep details of ABN or ACN numbers in your records.
- Always make sure that your clients understands your terms. Put them in writing and present them either when quoting a job or giving the final details to your client. Your terms should be printed on your bills. Be specific. State exactly what date the payment is due by. That way, there is no room for movement.
- Send accounts to customers promptly. Immediate invoicing will go into your client’s payment system quickly. If you are slow to bill them, there’s a good chance that they will be slow to pay you.
- Make sure your invoices state clearly what work has been billed and exactly how payment can be made and to whom.
- Discounting for cash, early or prompt payments can be a great incentive for clients to pay quickly. However, accept all forms of payment. If your business is set up to take credit card payments, and your clients are short of funds, they can still make payments when they are due.
- If a customer offers to leave a deposit, always accept.
- An advance deposit with payments at benchmark points for work requiring some time to complete, will provide funding for you to purchase materials and takes away the sting of a large bill at the completion of the job.
- If payment for work is late, make a point of ringing to discuss why. Let the client know what will happen if they have not paid in three or four days e.g. legal action or that you will put it in the hands of a debt collector. Make sure you follow through with these steps if payment is still not made.
- By sending monthly statements, those clients who do not keep accurate records will be reminded.
They will know that you are on top of your accounts and are aware of outstanding invoices.