How to Make Customer Pay on Time?
Those unpaid invoices can be a real threat to the financial health of your small business.
While big businesses can sometimes absorb unpaid bills, they put endangered small companies in late payments. So, how do you save them? Consider seven attempts-and-the-right methods that have helped in making instant payments to other small businesses:
Penalty: Start with a clear policy that states that late payments will be penalized. Let customers know that if you have not received any payment, then after the due date, you will start earning a small interest amount. Of course, if a customer signs in the past, you can always lower or leave the penalties if they agree to pay on a given date.
Discounts: Providing a discount, 5% discount for those who already pay - Both give prizes to good customers and you pay back as a saved administrative cost.
Contract: Some construction contractors include dispute-resolution language in their contracts so that customers can be discouraged from stopping payment on disappointing complaints. If the checks do not arrive at the time, then the contractor can tell the customers that they will start the arbitration process, for which the customer will need to cover their proper portion of legal expenses - they will be motivated to pay.
Advance payment: Deposit, down payment and maintenance can all help in protecting your business. For labor-intensive projects, try the leadership of custom clerker Rita Shelfoff. When the job is completed, it requires half and more. Once he receives the deposit, the shelf says, "I send an invoice to people who clearly tell that the remaining balance should be paid before the balance is left."
Good relation: Customers are used to obtain payment reminder from a stranger in accounting. However, at President Orlando, Fla.-based ForTheFit.com, President Consuelo Bova says, "Customers only hear from sales staff, with whom they have long been related, they get personal attention in the sales cycle. Our customers are timelier to pay for our bills. "
Mixed Methods: If you offer different types of services, why is not the basic payment agreement on the type of work a customer receives? Hamilton con-based business strategist Maria Marshall says that he needs payment on the day of service to avoid cost of the following days.
But while consulting, she says, "I use the 50-25-25 pricing structure: 50% forward, 25% midway and finally 25%." By increasing the payment, it allows more flexibility for the customer, ensuring that the products and expenses will be covered.
Conversation: Sometimes it is worth negotiating the agreement that both of you can accept. You should still set strict limitations, but if prices are to maintain business with desirable customers then offer to lower their prices.