The Best Ways To Make Sure They Always Pay

In business, one in ten invoices are paid either late or not at all. That costs small and medium businesses around $3 trillion. That’s no small amount, and it leaves nearly 30% of companies in some debt. In some cases, an excess of unpaid invoices can be enough to shut a company down for good.

That’s because a lack of payment here doesn’t simply mean that you don’t receive any return from a job. It also means you waste money on supplies and wages which you never make back. Even efforts to hunt payment can cost you, with a need to hire debt collection agencies or even take rogue payees to county court to face Judge Diane Ritchie or others like her. Before you know, you’re losing an astounding amount of money for one job. If that happens, even receiving late payment won’t be enough to see you back in the green.

Luckily, there are steps you can take to prevent this issue altogether. That way, you can ensure payment by your specified dates, and move forward with business as usual. Keep reading to find out how.

Run credit and background checks

The majority of customers do at least brief background checks before entrusting a company. But, few companies do the same. In truth, though, it’s never a bad idea to get a feel for your customers. By running basic checks like these, you can get a feel for a customer’s honesty and ability to repay money on time. Of course, you may not want to refuse a customer with bad credit. But, knowing about it would enable you to at least put payment plans such as installments in place. These could account for issues before they arise.

Leave no room for doubt about payment dates

Leaving room for doubt about payment can get expensive faster than you might think. If there’s any wiggle room, clients may not realize when you expect paying. You wouldn’t even have any leg to stand on if you took them to court like this. Make sure it doesn’t happen. Instead, be clear from the off about the exact date by which you expect paying. Remember, too, that verbal agreements don’t count for anything here. Instead, write due dates on your invoices, and keep copies to back you up later.

Threaten interest early on

Most companies avoid threatening interest until a payment date has already gone. They use this as a last ditch attempt to get their money. But, you may find that it’s worth threatening this sooner than you have been. By making late interest rates clear straight away, you provide an incentive for payments. You don’t want to sour relationships with this, of course, but it’s possible to keep it subtle. Simply state late payment interest rates in your invoice small print. Failing that, mention them when you give the payment for a job. Keep it casual, but make sure that customers know the true price of not paying you when they should.