Would you rather have payments from your customers come flooding into your office, or arrive as a slow, tentative trickle? Of course every entrepreneur would prefer the former, but this isn’t always how it works. You likely don’t need to be told, but we will tell you: Slow, late, and delinquent payments represent a major economic burden for many small business owners.
You don’t just want to get paid, of course, but to get paid on time—as quickly as possible. While you can’t necessarily force customers to read their invoices and pay them on the spot, there are certainly some steps business owners can take to ensure the most efficient payments possible.
- Here’s an obvious one: Send out your invoices as quickly as possible. Actually, that may not be so obvious after all; it is surprising how many business owners drag their feet when sending out invoices. Rather than let days or weeks go by, prepare and send an invoice as soon as work is completed—using an invoicing app to make it sleek and automatic.
- Provide itemized pricing. Your invoice should explain where every single one of the client’s dollars is going. A nebulous invoice—one with just a single dollar amount—will lead to questions and delays in payment. An itemized breakdown shows the client exactly what kind of value he or she is getting.
- Be firm, but also polite. This is a fine line to walk. On the one hand, it is important to make it clear when invoices are due and what the overdue penalties are if any. At the same time, good manners go a long way. Studies have proven that including the word “please” on your invoice design will significantly boost the odds of it getting paid on time!
- Personalize your invoices. Leaving space on your invoices for comments or explanations will allow you to leave the occasional personal note—perhaps just a brief mention of how much you enjoyed working with the client. A personal connection can make a world of difference when it comes to getting invoices paid.
- Finally, consider sending payment reminders as needed. Sending an invoice is not the end of the process; the end of the process is when you actually get paid. Until that happens, there’s no reason why you shouldn’t send an occasional follow-up to your initial invoice—maybe midway through the payment term?
The invoicing process is one of the most important functions in the life of a small business owner because doing it right means getting paid—not just on time, but perhaps even promptly! As such, it’s nothing to leave to chance.