Last updated on December 20, 2021
The Following is Written By a Guest Author For the Outspoken Oppa
As a small business owner, entrepreneur, or solopreneur, the occasional late payment is inevitable. Whether a client or customer is experiencing cash flow issues, late payments of their own, or there’s a problem with your invoice, there are many reasons why a payment may be late — and it’s important to handle each situation in a way that doesn’t damage your customer relationships or negatively impact your brand equity.
Review these tips from The Outspoken Oppa to learn how to prevent and manage late payments while improving your brand equity and increasing customer loyalty.
Don’t Wait to Follow Up
Communication is key to any good relationship, and the same goes for relationships with clients and customers. If a payment is late, the best thing you can do is reach out with a friendly phone call or email rather than waiting around for your client to pay on his or her own. A friendly email reminder is a good first step, and you can follow up with a phone call if necessary.
When following up with your late-paying customers, it’s important to stay calm and cool — and refrain from coming across as confrontational. Bullying your clients or coming across as rude will only worsen the situation and damage your relationship. That said, Emily Schmidt of Indy shares some tips for following up with clients in a constructive way and encouraging them to pay promptly.
Offer Customer Payment Plans
Customers value flexibility, and payment plans provide them with the flexibility to pay their balance over a period of several months or years. Payment plans, according to InvoiceSherpa, help to build positive relationships, boost revenue, and prevent late or absent payments. So if your customers or clients are struggling to pay their invoices on time, a payment plan might be a good option to consider. Come up with an arrangement that works for you and your customer, and both parties will be happy.
Prevent Late Payments in the Future
Now that you know how to deal with late payments from customers and clients, it’s time to make a few changes to your invoicing process to prevent late payments in the future. Here are some ideas to consider:
Use a payment processing system. Payment processing software can enable you to quickly and easily receive payments from customers and clients. Payment processors can often be used to accept credit and debit card payments as well as other payment methods such as PayPal, Venmo, Apple Pay, Stripe, and SecurePay — making the payment process a whole lot easier for your clients.
Offer early payment discounts and incentives. Early payment discounts could help to increase customer loyalty and motivate your customer and clients to pay their bills on time, according to Mary Girsch-Bock of The Blueprint.
Revisit your contracts and invoices. Make sure your customer contracts include your branding and contact information, as well as the terms of your projects and payments (e.g., payment due dates and accepted payment methods). To build brand equity, your invoices should also be branded to match your website, social media channels, and other marketing content.
If you have extra-large contracts that you’re emailing your customers, it can be time-consuming and difficult to send these documents. To reduce the file size and maintain the quality of the document, use a free compress PDF tool.
Maintain Relationships With Customers and Clients
To keep customers and clients happy and to encourage early or on-time payments, it’s important to maintain your relationships through regular communication. Keep in touch with your customers and clients via phone, email, or mail, invoice your clients promptly, and consider rewarding those who pay promptly. You’ll build long-lasting relationships with your customers and clients, prevent payment delays, and keep your business running smoothly — all while protecting the image of your brand.
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