Small business owners are passionate about their craft and their customers—it would be nice if that’s all it took to run a business. Unfortunately, there’s more to it than just what you do. Financial management often weighs business owners down and trying to keep track of the constant inflow and outflow of cash is exhausting. If you don’t stay on top of customer payments, you can easily fall behind on your business payments and things can quickly spiral into debt.
If overdue payments are causing stress in your business, we’ve got some tips for getting things under control, so you can rely on consistent systems and cashflow.
Use Invoicing Systems
If you’re manage invoices manually, it may be time to consider an invoicing system so that nothing slips through the cracks. These programs help you keep track of outgoing payments and can send automatic reminders about upcoming payments due and overdue payments. Some popular invoicing softwares are Quickbooks, HoneyBook, and Square. While many systems do have a cost associated, many offer free versions that take out a small percentage of each payment instead.
Use Written Terms and Contracts
When it comes to payments, it’s important to make things as clear as possible for your customer. All invoices should state the work that was completed, the amount owed, and the date that the payment is due. It’s also a good idea to use a written contract when working with a client, as this establishes ground rules for working together as well as the conditions surrounding payments. Some businesses include a late fees or daily percentage that the customer must pay on late payments. Written agreements provide accountability for both the business and customer, and they can make it easier to enforce terms and penalties associated with late or missing payments.
Establish Shorter Payment Periods or Upfront Payment
Giving your clients a shorter window of time to make payments is another way to hold them accountable. This can prevent procrastination on their end and keep paying you at the top of their mind. It’s a good idea to send out invoices promptly after the work has been completed. Some service-based businesses even require an upfront payment before they begin work. This may be a flat fee or a percentage of the total cost. Upfront payment is a way to ensure the client is serious about the work and willing to pay the money it costs to have it completed.
Practice Better Communication
Communication is key in all areas of your business, especially when it comes to managing your clients. If you’re noticing that a due date is approaching and a client hasn’t paid yet, don’t hesitate to check in with them. Opportunities to connect and clear communication will help establish expectations and avoid confusion.
How Viking Client Services Can Help
At Viking Client Services, we can help small business owners manage payments so that they can avoid falling into debt. We offer flexible and affordable payment solutions, tips for business management, and collections services that help small business owners to keep their operations on track. If you’re curious to learn more ways that Viking Client Services can help you with your business’ needs, contact us today or see the services we offer. We’re here to support you, so you can focus on supporting your customers and running your business.
