As an entrepreneur, getting paid is your lifeblood. You need money to flow into your account regularly to ensure that you have the cash to pay wages, make investments, and continue to develop your product. A customer who doesn’t pay on time can mean the difference between success and failure, especially for a firm that is just starting out.
It is critical that you get paid on time. But how? Take a look at this advice.
Create A Payment Policy
As a startup, you probably have a lot on your plate already. Creating a payment policy is hardly the first thing on your mind. But payment policies can often mean the difference between attracting paying clients and not.
Payment policies are useful because they help to create an air of professionalism around your firm. People are much more likely to pay for your services if you have a clear set of terms and conditions staring in no uncertain terms how much you expect to be paid and when. Representatives from other businesses and your clients take note when they see clear payment terms because they make it clear that you take payment very seriously indeed.
Avoid Wasting Time With Non-Paying Clients
It can be tempting to take on all clients when you first start your business. After all, you need to get money from somewhere. But deadbeat clients don’t help to lift your bottom line, and they can wind up dragging you down.
First off, keep an eye out for bargain hunters. Bargain hunters will try to get your prices down as low as possible and avoid paying anything more than they need. Bargain hunters will drain your firm of resources and time and leave you feeling whether all your hard work is worth it. If bargain hunters refuse to pay the full price, avoid them.
Second, be vigilant if a client refuses to sign a contract. Reasonable, fee-paying clients will be more than happy to sign a contract specifying how much and when you will be paid. Clients who are hesitant may want to avoid paying for some nefarious reason (like they don’t have the money to pay you, or they want loopholes to avoid paying in full).
Finally, run from clients who cannot provide evidence of their creditworthiness. You can check clients’ credit rating using cheap tools online.
Collect Payments Automatically
Thanks to online banking, services like SATbill, and automated billing, it is now easier than ever for young companies to automatically collect payment. Automated payment collection bypasses the need for there to be a human in the loop, reducing the chance that they will forget to pay. Set up automated billing whenever possible.
Be Persistent Collecting On Overdue Accounts
Chasing up non-paying clients can be a hassle. But doing so is essential if you are to get paid. If you notice a client hasn’t paid, then get in touch with them immediately: it could just be an administrative error. If a client hasn’t paid after 30 days or so, then start charging them for the privilege. That will incentivize them to make a payment more quickly.