It’s all about the money… it makes the world go round. Anyone taking frequent looks at calendar and bank statement knows about the importance of paying bills on time. That goes for your own bills just as much as for the invoices you send your customers. We have a couple of methods to improve your invoices and make your customers pay sooner because they can react to their dues easier and faster.
Tip 1: Be complete
When you are sending out your invoices, make sure that all required information is present in the document. Few things are more irksome than a faulty invoice that is not getting paid – faulty due to minor things you yourself could have avoided completely. Going through the ordeal of cancelling the invoice, rewriting and re-issuing it and finally getting paid may take several days.
So, better list the following elements clearly in every of your invoices:
- Name and address of the supplying company
- Tax ID of the supplying company
- Name and address of the recipient
- Invoice number
- Invoice date
- Date of service or delivery
- Details about the service rendered/product delivered
- Net price, applied tax rate, gross price
Tip 2: Be available
It is important that your customers can reach you in case of problems or questions. Therefore, always include your contact details in your invoices: phone number, email address and bank details. If your customers can reach you in time, it may avoid larger issues in the long term.
Tip 3: Be respectable
Any decent invoice also shows character. It may be achieved by the form, the font used, your company’s logo on the top or a full company stationary. About these details, you should be precise, consistent and serious. Avoid funny or comic fonts, unless your business involves selling costumes, toys and joke articles – and even then, it should be part of the stationary only. Always ensure, that any customer and invoice data is readable clearly.
Tip 4: Be quick
Many invoices are still sent as paper mail – but that is not a requirement. Invoices created online are also legally valid and the customers can view it already on their screens; ideally with the option to print out. Sending the invoice as a copy via email will deliver it faster than paper mail, also giving you the certainty that you set it off.
Tip 5: Be flexible
In the internet age, paying by invoice seems almost outdated. These days, almost all online shops offer several payment options. You can be accommodating here. Next to paying by invoice and money transfer to your company bank account, offer alternatives: prepayment, cash on delivery and direct debit are possible; even faster ways include credit card and online payments, i.e. via PayPal.
Tip 6: Be reliable
Your customers want to be treated seriously, because money is usually not a laughing matter. Thus, a respectable appearance on your side is important. Including a due date for payment in your invoices shows your goodwill but also your seriousness; both being characteristics one would expect from a respectable and reliable business partner.
Tip 7: Be tough, be lenient
Should a payment be late and exceed the due period you have set, show your seriousness. Inform the customers that there will be fees for belated payments, so they will know about the consequences beforehand. Such a fee should not be too high, but merely a small nuisance; still sufficiently irksome to avoid repetition.
Also, retain the option of rewarding on-time payments. Small discounts for early payments may just sway the bargain hunters among your customers to pay rather today than tomorrow – and feel good while doing so! This will pay off especially, if you offer an online payment option as suggested in Tip 5.
Tip 8: Be individual
Use this option, if you have loyal customers who use your services repeatedly, even regularly. Offer these customers a special rate for your work, so that they can make identical payments each month. Setting up standing orders at the bank are much more comfortable than monthly manual payments.
Also, you can agree on individual payment terms with customers to accommodate them. If you can determine the invoice sum to be quite high, offer installment payments. Don’t forget to fix these agreements in written form. That way, both sides may use the written agreements to minimize misunderstandings.
Tip 9: Be personal
You don’t need to be the customers’ best friend – but try to be more personal. On an emotional level, owing the money to an acquaintance is harder than owing it to a stranger. If you see you customers as persons (and they see you the same way), if the relationship is slightly more personal than with completely neutral business partners, it may be all the difference that is required. Already sending an email for the holidays or the new year might bring you this bonus.
Tip 10: Be persistent
If all fails and the customer still does not pay on time, a repeated inquiry may help. Politely asking (soft “nagging”) may be enough, so you need not take to other means (like late fees, as in Tip 7) or even engage a legal counsel. Stay friendly, understanding and diplomatic.
We hope that this list of tips will help you improve your customers’ payment practice gently but thoroughly in your favor. Do you have your own methods of making your customers pay their invoices sooner? Leave us a comment and tell us about it.