Financial Data
Updated 29 Feb 2020

How to get paid faster

Ensuring that your customers pay on time is one of the biggest headaches for entrepreneurs. Here are some tips for getting paid faster.

18 July 2012  Share  0 comments  Print

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This guide will give you an overview of steps to take to ensure that customers pay promptly for your products and services.

It’s estimated that around 50% of SMEs struggle to get payments on time. When customers take too long to pay, it can shut down a business. But there are several ways to smooth the payment process.

1. Get your customers to sign up

Ensure that you have signed contracts with your customers where possible, and state your payment terms clearly. Be sure that they know what the credit terms are, what discounts you offer for prompt payment or bulk buys, and whether you charge interest on overdue accounts.

2. Always check whether a purchase order is required

Many large organisations will not pay an invoice without a purchase order. They are also unlikely to call you and ask for one. Your invoice will simply sit on a desk, not be entered into the system, and not paid.

3. Send invoices immediately 

Business owners are often slow at getting their invoices out once they have completed their work for a customer. Remember that your client has no obligation to pay until they receive an invoice, so don’t wait.

4. Itemise invoices

Don't send your customer an invoice with a total rand amount. Rather itemise everything the customer has bought or every service you have provided. This will also give you the opportunity to highlight any discounts or specials. This enables you to show the client exactly what they are paying for and to demonstrate any added value they may have received.

5. State payment deadlines clearly

Although your customer may have signed a contract, don't allow the opportunity for any confusion. Reiterate your payment terms and policies on each invoice so that there is no ambiguity.

6. More invoices for smaller amounts

Avoid sending clients a massive bill where possible. Smaller invoices are easier to pay. Customers are also more likely to sit on a bill for a large amount. Getting paid small, frequent amounts is good for cash flow, and it also protects your business from losing a lot of money should your client go under while they are sitting on an unpaid invoice.

7. Make a personal connection

Get to know the person who writes the cheque and send them a thank-you note every now and then. That will ensure you are not just another vendor to the accountant and that they remember you when they see your invoice.

8. Use the telephone to chase delayed payments

Many experts in the field agree that making phone calls can be up to 80% more effective than emails and letters. Prioritise your cash collection and chase the oldest and largest debts first. Be friendly, but also be firm and remind them that interest will be charged on late payments.

9. Check that every invoice is accurate

Few customers will rush to query an invoice that doesn’t look right – they just won’t pay it.

10. Make payment easy

Offer a range of payment options to your customers and put your payment methods on all proposals, invoices and statements. For example, you might accept credit cards, debit cards, cash and EFTs. Different methods will suit different customers, so offer as many options as possible.

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