Setting up a seamless invoicing, accounting and book-keeping system is essential to good business. Whether you’re running your own business, just starting-up, embarking on a solo-preneur journey, or you’re a sales manager for a multi-national corporation; getting clients to pay on time means constant growth.
No matter how big or small your business is, income is key to survival (it’s the oxygen for your business), and building positive relationships with your clients can help ensure that.
Excellent customer relationships will also mean clients are not just paying clients – but returning clients. When you’ve established trust with your clients, they’ll want to support you in return, and they’ll want to pay their bills on time too, so building positive client relationships is essential.
In fact my three key rules in business are:
For those few clients who tend to take their time paying their invoices, you can also try introducing a fool-proof payment system or process, as well as a clear contract, and automated reminders. Hopefully following these simple tips will help you to get clients to pay on time.
Systems and processes
When two people are on the same page, and you have a transparent system and process in place, there’s less likelihood of miscommunication and late payments.
Before entering into any work with a new client, make sure they clearly understand what you’ll be doing for them, and what they’ll be expected to do in return too.
Exchanging something in writing which outlines;
- How you work
- Your payment requirements
- Your payment timeframe
- Deliverables, and
- Payment methods
You might draft a one-pager that lists these details too, and send it to each new client, or have it published as a page on your website that you can link to over email.
However you decide to communicate your working process, make sure its clear, and that each new client understands how you work, how you invoice, and how they’re expected to pay by the due date.
Contracts are critical if you’re exchanging resources, work, time and money, and they protect everyone involved in the event something goes pear-shaped.
If you’re a start-up and funds are limited, you can source a lot of the contracts you need to cover all bases online or through handy resources like Legally Yours.
Having a professional pair of legal eyes run over your contracts is the safest option though, just to make sure you’ve mentioned everything you need to. Have each new client sign a contract too, confirming their acceptance of your terms and their responsibility to pay within the timeframe you’ve set.
Request all their correct details such as an accounts email, ABN/ACN, mailing address, and contact phone number. The more information you have, the better, in the event you need to chase up an invoice down the track.
Make sure you’ve covered your responsibilities too, such as outlining your payment terms, your late payment policies, direct debit options, accepted payments, any surcharges you’ll add and for what reason, your bank account details, and what a client needs to do should a payment extension be needed.
Automating your invoicing procedure can help secure payment from your clients on time, and it’ll save you hours sending all those follow-up emails too.
Using an online invoicing system such as MYOB, Xero or Quickbooks is a great start, and by setting up automatic reminders, you can gently remind the clients who need a little nudge.
You can also opt for a pay-up-front system, and have clients pay you in full or in-part before you start any work for them. Depending on the kind of service or work you do, you may also offer an incentive for early payments, or on-time payments, such as a small discount, an additional benefit, or a credit towards their next project with you.
It might take a little time getting set up and making sure you have your payment policies and systems in place, but once they’re set up, they’re set up. Communication, clear processes and fool-proof systems will save you – and your clients – time and money in the long run.