As you know, getting clients to pay their invoices can sometimes be difficult. After all, you worked your tail off to get the job drawn up, sent out to bid, built and closed out. You dealt with all the problems that went along with completing the project. Through it all, you knew that your payday was on its way, which is what kept you going at times. Then, you find out, your clients aren't paying their invoices. You might wonder what you can do about it. Well, you might be surprised to know that there is a lot you can do.
Make Sure You Have a Good System in Place The first step in ensuring prompt payment on a regular basis is to have a good system set up for billing. You can do this with software designed for just such a purpose. This will help you track time committed to a particular job and keep up with all the change orders and other additional expenses that alter your billing amount. Good software will also link to your business books, ensuring all your business finances are well organized.
Be Up Front with Expectations Although the end of a job it’s a little too late to be putting this tip into action, at least you can do this from now on. With new clients or at the beginning of a new job with a current client, you need to explain how you invoice. For example, tell them you send out invoices every 30 days. Let them know how long they have to pay what they owe. Be up front. Then, if clients don’t want to pay in a timely manner, you can remind them about your preset expectations and how they agreed to comply. Make sure you get their signature on a contract that shows the payment terms upon which you both agreed.
Consider Implementing Interest on Late Payments Believe it or not, the government actually has legislation in place that protects small businesses against late payers. Wow, it turns out they are good for something after all. Who knew? According to this legislation, you can add interest to a debt up to a certain amount and even procure some of your debt recovery costs.
Address the Problem in Person Sending past due notices, emailing a client and leaving messages are all typical ways to encourage payment. However, they aren’t always effective. After all, it’s a little too easy to simply disregard an email or message. The way to ensure you have an effect and actually get something accomplished is to show up in person. Sure, it takes time out of your busy day, but look at it as a marketing endeavor. By showing up and maybe going to lunch with a client, you can reestablish the working relationship, find out about any upcoming jobs and drop a hint about your missing payment. You might even get a check that day if you let them know you are coming. This should help you collect on unpaid invoices