No matter the industry, if you bill your customers via invoice, chances are that you’ve had to
deal with slow-paying customers. Even though this issue is fairly common, these customers can
impact your cash flow and your bottom line. Here are a few tips to remember when dealing with
payments coming in slowly.
1. Send Your Invoices ASAP
As soon as your products are delivered or your services are complete, send your customer an
invoice. The longer you take to send it out, the longer it takes for the invoice to be paid. In
addition to sending your invoice out in a timely manner, be sure that your payment terms are
simple and clear. This helps avoid any late payment due to confusion about when it should be
paid and what payment methods are accepted.
2. Offer an Early Payment Discount
Incentives can work wonders when used to encourage customers to pay early. This could be a
percentage off of their invoice total or something else valuable, like a coupon for a future
purchase. Don’t hesitate to get creative when coming up with incentives, there’s no wrong to go
about it. Just be sure that it’s something worthwhile to your clients, something they would
actually take advantage of.
3. Send Out Payment Reminders
Being proactive in sending out a friendly reminders can eliminate late payments due to
forgetfulness. If your client happens to be another business purchasing your goods/services,
your invoice could potentially get lost amongst other things they need to take care of. A quick
reminder might be all they need to send out their payment.
4. Consider Invoice Factoring
There are many factors that can influence when your customer pays and why a payment is late,
however you have your own expenses that need taken care of. You might end up in a situation
when you need that money to continue running your business as usual. If this situation arises,
consider factoring your invoices. With invoice factoring, you sell your outstanding accounts to a
factoring company, like CoreFund Capital, and then you receive a portion of the amount due as
a cash advance. Dealing with customers that are slow-paying is a common problem seen
throughout many industries, but you shouldn’t allow it to hinder your business in anyway.
To find out more about how we can help your business, contact us today!