This will not only help them with their cash flow management, but will also train them to make prompt payments a normal practice. For instance, send your invoices during the 1st and 15th of each month, make sure you stick to a schedule of sending invoices on those dates. Like tightening up your payment terms, you also need to tighten up your payment schedule. Follow a regular payment schedule - that works for your customers Even better if you can negotiate a shorter payment term - like 15 days - to guarantee that money will keep coming into your business.ģ. So it’s advisable that you implement a stricter payment deadline. There are some customers who are too stubborn and disorganised and will choose to not pay you on time no matter have flexible your terms are. But bear in mind that this can lead to financial problems. Offering flexible payment terms is a smart move if you want to keep your customers happy and guarantee that paying is always convenient for them. You can emphasize the terms you have agreed on each invoice that you deliver, just make sure to choose your wording carefully.Īccording to a study from Freshbooks, clearer phrasing like “payment due within 20 days” makes it easier for customers to identify the payment terms compared to the phrasing “net 20”. Discuss it together to ensure there will be no misunderstandings in the future. Whether you just signed a new customer or are renewing a contract, it’s essential that there’s a written agreement between the two of you that summarizes the exact payment terms, deadlines, and other important payment details.
Thankfully, there are lots of ways you can get customers to pay their invoices on time, without compromising your relationship with them.
Several studies show that accommodating late payments results in serious cash flow problems. So, no matter how well you manage your cash flow, if you’re not getting paid promptly, you’re at serious risk of running out of money. However, actually doing it isn’t as easy as it may seem, especially if you have customers who never pay on time. Managing your cash flow effectively is one of the most important things you can do to ensure the success of your business.