Here are some effective tactics for getting slow-paying accounts to pay more quickly
Some accounts seem to take forever to pay their bills. This can be a real problem, especially for small business owners who rely on payments for cash flow. Here are some effective tactics for getting slow-paying accounts to pay more quickly.
Use the Phone
Instead of emailing your accounts about late payments, pick up the phone and make a personal connection. It is much easier to ignore an email than a phone call. Be friendly, verify that they received your invoice, then ask when you can expect the payment.
Put Everything in Writing
Clearly outline payment terms in your contracts. You cannot ask customers to adhere to payment terms that have not been put in writing.
Get to know the people in charge of paying the bills. If an in-person meeting is impossible, build a relationship over the phone. Learn their names, remember them around the holidays and treat them with kindness and respect. You are far more likely to be paid if you build these relationships, especially if you are a nice person.
Watch Out for Purchase Orders
When you get an order from a new customer, ask whether a purchase order is needed. If so, insist on a copy or a PO (purchase order) number at the very least. Record the number on your invoice to ensure that it can be matched with the corresponding purchase order by the accounts payable department.
Practice Situational Invoicing
Small businesses can be more flexible than larger companies. Some companies are more likely to pay large invoices slowly, but are more apt to pay several small invoices more quickly. Invoice these accounts often to get paid more promptly.
Send Invoices Right Away
Submit your invoice as soon as products are delivered or a job is complete. The clock does not begin until your client gets the invoice, whether it takes them 14 or 90 days to pay.
State Payment Terms Again
Your initial contract already explained the payment terms, but so should your invoice. Reiterate the terms once more to eliminate any possible confusion.