9 Tips to Decrease the Volume of Late Payment from Customers
The business owners know that it is quite irritating to get the late payment from the customers. There could be nothing more frustrating than hearing excuses from the clients. Luckily, there are various things that need to be considered in order to decrease the number of customers who pay late.
It is recommended that all business owners should think in a different way to encourage customers to pay before the deadline. You should consider the accounts receivable software integration to reduce the volume of late-paying customers.
Here, in this article, we have described different ways to get payments before the deadline:
Sign A Contract
Whether you are running a big corporation or a small pop shop, it is very important to sign a contract. In this contract, you should clearly mention the payment terms and policies. You should never start dealing with any client or customer without signing a contract.
Ask for Upfront Money
You can ask your client for upfront money. It will increase the probability of getting paid before the deadline. If your clients pay upfront money and due to any reason, they fail to make payment before the deadline, then you can decrease the late payment charges. Moreover, asking for upfront money is also a good way to check whether they are interested in paying the amount or not.
Charge Late Payment Fees
Nobody wants to pay more than the billed amount. Therefore, the best way to encourage your customers to make payment as soon as possible is to start charging fees for late payment. But, you should set the rules for charging the late payment fees. You should set a certain percentage on the basis of the number of days passed away after the deadline. With the passage of days, the late payment fee will start increasing.
Manage the Account Receivables
If you want to reduce the number of customers who are paying late, then you should put in a lot of effort to manage the account receivables. If you are able to manage your accounts receivables efficiently, then you can easily get the payments at the right time. It is recommended to invest in the account receivable software that can automatically manage the account receivables and reduce the number of unpaid invoices. The account receivable software, such as ar integration for QuickBooks, can automatically generate the invoices and send it to the customers.
Send Invoices at Right Time
Most business gets a big chunk of money every month. The biggest problem in this is if the customers delay in making payments, then you will get cash in your hands to make payments of bills. The best solution to this problem is to send the invoices two times a month. The second invoice will act as a reminder to your customers. If any of your customers fail to make a payment due to a hectic schedule, then the second invoice will remind them about the payment. It will help you to collect the payment at a faster pace.
Automate Invoicing Sending process
According to the survey, most customers do not pay at the right time because of a delay in receiving the invoices. The business owners have to manage various other operations along with the collection management process. Due to a hectic schedule, they fail to send the invoices at the right time. You should invest in accounts receivable management software. This software helps in automatically creating and sending the invoices. Also, this software keeps track of all accounts receivables and lets you keep track of customers who usually pays late.
Offer Wide Range of Payment Option
Remove the barriers from receiving the payments! You should provide a wide range of options for your customers to make payments. It will offer convenience to the customers so that they can easily pay the due amount. You should allow your customer to make payment through debit card, credit card, or payment application on the smartphone. Some customers want to use the traditional method for making payments. Therefore, along with the new technique of payments, you should also collect payment from the traditional techniques.
Hire Trained Staff
You should create a separate accounting department in your business. Hire the trained and skilled accounting employees along with the TroveworksQuickBooks integration app, who can take care of all account receivables and help in maintaining the optimum cash flow. They will keep track of everything and also take follow up on phone calls if any customer fails to pay at the right time.
Offer Discount for Early Payment
Another good way to encourage customers to make payments as soon as possible is to offer a lucrative discount to the customers who are paying early. People love to have a discount on the billing amount. Therefore, you should convey this message to the customers before signing a contract. You should keep track of early paying customers with the help of accounts receivable technologies software.