How to Deal with a Late Payer - 5 Tips for SMB-Owners

Late payers are among the most common problems for many new business owners. Now getting paid for your work on time is an unpleasant situation for every entrepreneur. However, the destiny of new business owners depends on every single payment they (don’t) receive.

That’s why rookie SMB-owners need to learn how to cope with such problems beforehand. We’ve been there, as well as many of our collaborators. So, we’ve decided to gather the top five most effective strategies that will ensure timely payments for new entrepreneurs.

1)   Use clear language in invoices

Some business people don’t pay their service providers on time due to misunderstandings.

For instance, if you write Net 30 in your invoice, it means that the payment is due within 30 days from the invoice date. However, the business world is globalized today. Hence, perhaps some of your collaborators come from different business cultures. They might not understand this or similar labels properly.

Because of that, use more direct and clear instructions. In this specific case, write “Payment before” or “Payment due” and the deadline next to it.

That way, you’ll avoid the potential confusion.

2)   Offer discounts for early payments

When you’re at the threshold of your SMB-career, it’s vital to learn some tricks of the trade that will ensure steady cash flow.

One of them is to offer discounts for early payments. This is a reasonable and beneficial often while you’re still making a name for yourself.

So, let’s say that you want to charge $1000 for a business project but you’ll cover your expenses even with $500. The other $500 will contain your earnings and the taxes. So, you have some room to recalculate the final sum that you’ll charge to the client. You could often them a $100 discount if they pay you within two weeks from the delivery date.

On the one hand, you’ll ensure steady cash flow that way.

On the other, these clients will remember you as a less expensive provider so they’ll probably hire you for more projects.

3)  Register for various payment solutions

Today, you can get paid and pay others in many ways. Some businesses still insist on traditional wire transfers to their bank accounts. Others opt for PayPal, Payoneer or other alternative online payment methods.

It’s important to register your business on several payment solutions, especially if you work with clients from different parts of the world.

While the companies in the West usually opt for PayPal, Asian companies most often turn to Alipay, PayEase, and other specific payment solutions.

Make sure to inquire about the most popular payment services in some specific parts of the world.

If you get them enough options, they will usually pay you on time.

4)  Setting up add-ons on the website

If you want to speed up the payment process and improve the cash flow, think about setting up some add-ons on the website.

For instance, most eCommerce platforms come with ready-made payment add-ons. This is a practical option for owners of online stores. Their customers can easily pay them by clicking on the payment buttons.

Apart from these plug-ins, you can order some more specific solutions that will improve your payment efficiency.

As explained by the developers from the full-stack web applications design and development Houston team, business owners can get new plug-ins for WordPress websites. Also, it’s possible to make special additions for websites that are completely made from scratch.

The more payment options you use and the more functions you add to your website, the easier it will be to get all your payments on time.

5)  Follow up as soon as possible

Most accounting software tools used by small businesses have various elements for tracking late payers.

For instance, some of them highlight the payer red when they’re past their due date.

Others put the unpaid invoices at the top of the client list.

These notifications will help you keep an eye on later payers. When you notice each of these notifications, don’t hesitate to take some immediate actions.

For starters, send out a reminder email that the person in question hasn’t paid you on time. Let them know that any further delays will result in an increase in the amount of money they’ll need to pay you.

Also, attach the old invoice to that email but put a new due date.

If the payer misses the new deadline, as well, it’s time for a more assertive email. Still, bear in mind is that your main goal is to get paid. Therefore, in this email, you can offer them a reprogram plan, i.e. to let them pay you your money in installments. As we’ve already pointed out, new business owners need to ensure seamless cash flow to pay all their bills.

That’s why breaking your payment down to several parts is also a viable option with some late clients.

Conclusion

Timely payments are one of the key prerequisites for a new business to take off. On the one hand, rookie business owners need to cover their accounts payable on time.

On the other hand, they need to insist that their clients aren’t late with their payments.

While this is an ongoing process, it’s vital to learn its basics before you make your first invoice.

We hope that our tips for dealing with late payers will ensure that new entrepreneurs assertively enter the business arena.