When you have a small business, having late-paying customers can spell trouble for you. Often, clients pay late because they, too, forget that the bill is due. When clients forget, it is now your duty to remind and ask them to pay their invoice. However, how exactly do you do that?
Getting customers to pay their invoices can be simple if you know what to do first. To help you prevent accounts receivable problems, here are some tips from AR financing experts such as TAB Bank.
Add Terms and Conditions to Your Accounts Receivable
Being a small business does not mean you cannot add a fine print to your contracts. Ask the help of your lawyer in writing up legal terms and conditions to ensure you get paid. When you present the agreement to your client, make sure you inform them of these terms and conditions.
One way is to clearly state when payments are due and apply it for every client. It can be 5 or 10 working days, whatever works for your business. Your terms and conditions can also include an interest rate for late payments.
Establish an Invoicing Schedule
Having a set invoice schedule can also make it easier for clients to remember their payment dues. Pick a day to send invoices to your clients and ensure that you send invoices only on this day so that you do not fall behind on invoicing.
Do not be Afraid to Follow Up
Set a schedule for when to call up or email your clients and remind them to pay. It can be two days before payment is due or a week before. When you do follow up, always be respectful and polite. Remember that they are still your clients and their continued partnership with you is important for your business.
These are just some tips on how to handle accounts receivable and clients. If you need more information, you can always ask an AR financing expert to learn more. How about you? Which of these tips will help you in the long run?