As a business owner, it’s only natural you expect to get paid on time for the work you have performed. Unfortunately in many cases, the 20^th of the month arrives and only a small portion of invoices have been paid. Below are a few ideas you could try.

Make sure the due date on your invoice is clear.
Many businesses send invoices as soon as the work is completed or product supplied.  At the end of each month they send a statement for payment on the 20^th month. This has conditioned customers to wait for a statement and to pay on the 20th.

If your terms for payment are within 7 days, make sure the account is clearly marked that this is an invoice and statement. State the account is due to be paid within 7 days and the final date for payment is, ie 15 March 2015.  This makes it very clear when the account is due.

Get your invoices out early
If your invoices are not sent promptly you could be sending an unwanted message that you are in no hurry for payment. Make sure you send your invoice/statement within a day or two of work completed.

Follow up a late invoice promptly
Email the customer with a copy of your invoice. Let them know the day you sent the invoice and the date it was due. Let them know this is a friendly reminder the account is overdue and payment required.

Offer a discount for early payment
Offer a discount for early payment of accounts. Several years ago we were building a new house, and receiving lots of accounts every month. While we always pay our bills on time, the account that stood out the most was one that offered a 5% discount for early payment. Instead of waiting till the 20^th we paid the account straight away.

Mobile EFTPOS
Several banks are now offering this service for mobile businesses. By using technology you can create an invoice and collect it on site as soon as the work is complete.

Review your client’s payment history
Talk to your regular customers who are late payers. There may be timing issues with invoices or they prefer a different method of payment.  Some businesses might be able to pay by visa. If you provide them with your bank details the customer could possibly be able to transfer funds by internet banking.

If you have web site you may also consider setting up the likes of paypal to allow customers to pay by credit card.

Negotiate a contract
Provide a contract to your customers outlining the terms. Historically if your customer is a slow payer negotiate an upfront deposit prior to work commencing. Clearly state the payment terms. 

Subscription
If you have a customer who buys a product or service from you every year, you could offer them a monthly contract. Paying monthly helps smooth the cash flow for your customer. As an Accounting firm we offer our customers the option to pay monthly.

Credit check new customers
Be aware that many rogues change suppliers after abusing their credit with your competitors. If you are going to be providing large volumes of product or services on credit, it pays to have a credit check done on new clients.

Set up a contract for work detailing terms and conditions of your credit. As part an application for credit, ask for at least two credit references from local suppliers and give them a call.

Look at subscribing to one of the major credit reporting companies.