For tradies, billing can sometimes be a nightmare. It’s an unwieldy process for many who would rather spend more time on the tools and grow their trade than sending out invoices. Even after you sort out your invoices and forward them to the client, there’s no guarantee at all of a timely payment.
If you find it uncomfortable to remind your clients about late payments on an invoice, you are not alone. Even harder is trying to respectfully request immediate payment without causing conflict with a client.
Below are our best practice tips on how to get your invoice paid faster allowing you to worry more about the business than your bills.
1.Discuss payment terms before hand
Negotiating payment terms with your clients before you start working can save you possible hassles and confusion down the track. Choose the right payments terms. Be clear on when you would like to get paid, how you would like to get paid. Specific terms encourage prompt payments while flexibility can result in continually late payments.
When applicable, request a deposit before you start working on a project. Understand why it’s necessary and talk about it upfront. Even if it’s just a small amount or fraction of the total sum, it can improve your cash flow and clients will find it easier to clear the final balance. It’s important to explain to your client why need the deposit and ensure that they are comfortable.
3.Invoice your clients as soon as possible
You should send the invoice as soon as service is rendered. This increases the chances of getting paid quickly as your work is still fresh on the mind of your client. Always ensure the invoice is clear and easy to understand to avoid follow-up clarifications that can slow payments.
Try offering your clients incentives such as small discounts for early payment and interest on late payment. Such incentives may encourage clients to make payments on time. As much as late payment penalties may seem upsetting to a client, most clients understand the reason for it and instead of paying the penalty, they pay invoices on time. Discounts, on the other hand, can as well increase client loyalty. Even a small “thank you” here and there can work wonders. Never, ever underestimate the power of maintaining harmonious professional relationships with your clients.
5.Stick to a Regular Payment Schedule
If you want to get paid faster, create a regular billing schedule. You can use the invoice schedule to create a custom payment plan for your clients. Once you agree on the payment schedule with the client, they will be able to plan for payments in advance helping you get money in your bank faster.
6.Send Payment Reminders at Regular Intervals
Your clients are human and as such, they can forget to attend to an invoice. Sending a friendly reminder can help speed up the payment process. Do not wait until the payment is already late to tell them. You can automate the payment reminders eliminating the need to send them manually. Ask any tradie, if done properly and professionally, these simple nudges can be one of the best things you can use to get paid faster.
7.Make use of automated invoice solutions
Sending invoices manually via mail may take too long or even get lost adding increasing your billing costs. With invoicing solutions and accounting software like QuickBooks, you can process your invoices quicker and at a much cheaper cost. Making these options available to your customers enables them to make payments instantly.
At The Tradie Accountant, we provide tradies across Australia with secure online payment enabling their clients to submit payment for invoices directly with a credit card. The result? The money get in their bank much faster.
Our QuickBooks invoicing solution can also enable you to automatically invoice your clients and receive payments on time. For more information, you can contact us here. Alternatively, our consultants love to have a chat and you can give us a call on 1800 95 75 85