There is nothing as hurtful to any business as overdue invoices. While you might have some invoices paid early, your business would tank if all invoices were late. It is even a bigger struggle to chase down invoices as a business while trying to avoid sounding too harsh to clients.
The truth is, invoices have to be followed up or else you’ll risk bringing down your business. To avoid this, you have to learn the best approach for reminding clients to offset invoices without sounding like a nag. Luckily, having strict down payment policies can eliminate this risk.
Here’s how to make clients pay up front:
What Are The Benefits Of Upfront Payments?
Cash flows mean everything to your business. An invoice management platform that offers free downloadable invoice templates can make it easier to request upfront payments. This way, you get to fortify your cash flows as paying down bills becomes easy, instead of having to struggle to pay your bills without even knowing whether or not your invoices will get paid. Upfront fees will help cover the out-of-pocket costs you incur when handling client projects.
These costs will include equipment, outsourcing, and transport expenses to name a few. Upfront payments help mitigate the risk that you will be short-changed by your clients. When you have half or the full payment at the start of the project, you can already feel safe working through the project with the client.
The First Step is to Know Your Worth
What are your services worth for the specific project that you will be working on with the client? Having these details at your fingertips can help protect both you and your clients. While setting the fees too high will either lead to losing a client or the client complaining of you being too expensive, setting them too low is considered substandard.
Take into account all the costs that you will incur while committing to the project. In case it is an hourly job, account for the hours that it will take you to complete the whole job. If you feel stuck on deciding the exact price for your services, you can find numerous guides online on pricing your services, like this pricing guide.
You should do anything in your power to build the right level of trust between you and your clients. This will include offering as much information as possible to validate that you are a trustworthy business. In that line, a professional looking website could be an invaluable tool when looking to build trust with current and future prospects.
Next, be transparent from the beginning. Ensure that you are on the same page with your client on job expectations and payment details. In case you will be unavailable for the job until a few weeks later, it is also important to point this out.
Be Flexible With Your Terms
While you might want 100% upfront payment, not every client will be comfortable with that due to reasons beyond their control. Being flexible in negotiations can help you find common ground where both you and the client seal the deal while smiling. Offer discounts to a client that agrees to the payment terms.
You can also tweak the deal once the down payment gets reduced. As for payment methods, be flexible enough to accept a diverse range of global payment options. 87 percent of millennials are more comfortable doing business when payment is made easier. With flexible payment terms, your business wins big.
Businesses face the constant challenge of keeping their business afloat. As long as clients can agree to pay upfront or make duly payments, it becomes easier to run normal business operations smoothly.