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4 Tips to Get Your Small Business Paid On Time

It was recently reported that 53% of businesses that send invoices have had to wait more than two months to get paid by a client, with a further one in seven claiming they’ve had to wait more than a year!

With a staggering 85% of the 1100 business owners surveyed admitting that they’ve experienced problems with late payments, it’s no surprise that the government plans for a small business commissioner to help companies tackle the issue.

When you’re running a small business late payments can cause huge financial strain, and set your business on a slow path of destruction. It may not directly be your fault, but by not following just a few simple procedures you can cause yourself unnecessary stress.

Protecting your cash flow should be your main priority and by applying just a few simple steps you can ensure that you not only receive your payment promptly, but your clients are also aware of the consequences should they miss the deadline.

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Set a Contract

Never go by word of mouth or email to confirm any payment details.

This may make the process quick, but not drawing up an official agreement can mean you’ll be banging your head against the desk when they begin to ignore deadlines and constantly delay in paying you.

Detail the the agreement in contract and ensure to list specifics such as a confirmed date of payment and the process that will begin if any late payments occur.

Prevent the misunderstanding and have it set in stone so that both you and your client are on the same page.

Ask for a Deposit

It can feel like a gamble when you take on a new project, especially when you’re still new to business. Therefor taking on a small deposit can put your mind at ease that the client will follow through with the project because they’ve already invested money into it.

Not only will this establish a level of trust between you, but it will make you more inclined to take on new business and increase your profits.

 Be Prompt

What’s the point in waiting to send an invoice?

Show urgency in the payment required and ensure to send it at the same time each month so that your client is aware of when to expect the invoice.

If you create a pattern like this, they will feel more inclined to make payment quickly as they will have been prepared for the cost.

If you wait too long it will without a doubt get left at the bottom of the pile and eventually not become a priority.  As this is your bread and butter, don’t let this happen.

You have costs you will need to pay too, and delaying the process will only out yourself at more financial risk.

 Make a Connection

You may think it an odd tactic to make payments personal, but they are and it’s an unavoidable fact.

As a business you’ve probably spent lots of time talking to the sales person or the director, but what about the person whose responsibility it is to sign your cheques?

A simple thank you note to the accountant for a prompt payment will make them feel appreciated and put you in their good books.

Every time they come to arrange your payment they will be reminded of your kind gesture and ensure that things are processed promptly.

These may not be the most difficult steps to take, and you may think that they can be dismissed if you don’t find yourself in current money troubles, but adopting these methods early on can ensure your financial future is not going to have bumps in the road.

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