Mastering Payment Punctuality: Easy Tips for Timely Client Payments

You’re in business to make money.

So, set it up to make it easy for them to pay you.

This is the hardest thing for fellow business owners to admit to.

“I can’t pay my bills because my clients aren’t paying me for the work I do for them.”

However, I see it happen a lot. I know several people who are absolutely floored by this thought. Who wouldn’t pay their bills? Well, lots of people, frankly, and they’re not all evil @$$holes, either. Sometimes, they’re Aunt June, or your good friend Larry, or your neighbor’s Uncle Burt who saved your son’s friend’s cat. The people who don’t pay their invoices are everywhere.

And their reasonings are all over the place. When I’m assisting with invoice payment negotiations, I hear a lot of:

• “I didn’t know it was going to be this expensive when I asked him to do more.”

• “I couldn’t figure out how to pay the invoice and now I’ve got late fees. I’m not paying them. Make it easier to pay the invoice.”

• “I never received it. I figured you’d let me know what I owed you if you wanted paid.”

• “I didn’t get the invoice until a month after you did the work. That money is gone. You should have sent the invoice on time.”

There are so many other reasons that I’ve heard and collected over the years - a lot of excuses that involve cats, actually - but those are the top four.

Keeping your cash flow steady in a service-based business is essential. Late payments can throw a wrench in your plans and stress you out. So, how do you make sure your clients pay on time without straining relationships? Here are a few things I recommend doing each time I audit a business who complains about invoices not being paid on time.

Tips to Follow:

1. Crystal Clear Contracts:
   Kick things off with a straightforward contract that spells out payment terms. Highlight due dates, late fees, and accepted payment methods to keep everyone on the same page from day one.

   I do not understand why it’s so hard to talk my clients into issuing contracts, purchase orders, agreements, or just putting terms and conditions on their estimates and invoices, but it’s a fight almost every time. Guys. You don’t have to pay a lawyer to look at this. If you have a management software like Service Titan, Jobber, Housecall Pro, Honeybook, or something like that, they typically have contracts you can use. The absolute easiest thing to do is use a service called Legal Shield. For a small monthly fee, you can email a lawyer a question or have them draft or review your contract. It’s easy and the entire process takes around 24 hours. I highly recommend this!

2. Invoice Right Away:
   Send invoices as soon as you've delivered your service. Using professional invoicing software can help keep things clear and simple. Plus, a neat invoice makes disputes less likely.

   This is where automation comes in. If you’re using a software to help you run your business, as soon as you click close on the project, the invoice will be sent. That invoice is based on the estimate you provided. If anything needs to be added to the invoice, be sure to add it to the estimate and communicate that clearly with your client before hand. Communication and timing is crucial to getting your invoices paid on time.

3. Flexible Payment Options:
   Offer multiple ways for clients to pay, like credit cards and digital wallets. The easier you make it for them, the quicker they'll pay.

   You never know what your client can handle. Service providers can help cash-only clients, credit card-only clients, clients who refuse to use PayPal, or who will only use Venmo. They’re out there. Communicate, communicate, communicate. If you have limited payment options, make sure it’s listed on your website, your estimate or proposal, your contract, and your invoice.

4. Perks for Early Birds:
   Offer a small discount or bonus for early payments. It’s a great way to encourage clients to pay your invoice first.

5. Gentle Reminders:
   If a payment is late, a friendly nudge can work wonders. Reach out with a personalized and gentle reminder to get things back on track.

6. Automate Reminders:
   Use technology to set up automatic payment reminders. This saves you time and ensures consistent follow-ups without bugging the client too much.

7. Build Strong Relationships:
   Cultivate a good relationship with your clients. When they trust and respect you, they’re more likely to pay on time to keep the partnership going strong.

Wrap-Up:
Getting timely payments is all about clear communication, smart incentives, and efficient systems. By applying these tips, you can boost your cash flow, reduce stress, and spend more time growing your business. Need a hand with your payment processes? I may be able to help. A little proactive effort today can save you from payment headaches tomorrow! 😊