Steady, reliable cash flow is crucial for the survival of any small business – so taking steps to ensure your customers pay promptly should be a top priority.

When your clients consistently pay on time, you’ll avoid the dreaded “feast or famine” cycle. You’ll be able to pay your vendors, suppliers, and employees on time – and not least of all, yourself.

Implement these ten tips now to start getting paid without delay.

Check out the 10 tips

  1. Provide payment terms up front – always provide your up terms upfront in writing. Clearly state your rates, payment due dates, and policies for late payment.
  2. Invoice immediately – if you’re currently preparing your invoices manually, switch over to an accounting system with automated billing. You’ll never forget to invoice a client, and you’ll eliminate errors as you save time. The first time a client is billed make sure the contact information on your invoice is complete to avoid delays with processing.
  3. Follow up – call your customer immediately when a payment is past due. Ask for the status of the invoice and if there’s anything you can do to speed up payment. Sometimes a simple change, like including a purchase order number on the invoice, can speed up processing.
  4. Reduce terms – net 30 payment terms are fairly standard in business, but there’s nothing stopping you from asking for payment sooner. Some business owners make payment due at Net 7 or 10; others stipulate payment is due upon receipt of invoice.
  5. 5Reward early payers – consider offering customers a 2% discount when they pay their invoice within ten days. In this scenario, a $1000 invoice would be reduced to $980 – not a huge loss for you, but an attractive cash-saving incentive for your customers.
  6. Charge interest – as part of your terms, specify that if a client’s payment is past due, a weekly fee of 2% will be added onto the total until funds are received in full.
  7. Get paid upfront – collect a partial deposit – or the entire amount in full – before you provide a product or service to your customers.
  8. Go mobile – forego invoicing altogether by having your customers pay on the spot with mobile debit and/or credit payments.
  9. 9Suspend service – stop your supply of products or services until you receive payment. With this tactic you’ll avoid the accumulation of an even greater loss with a consistently late or non-paying client.
  10. Stay on top of AR – monitor your accounts receivable on a weekly basis so you can act fast if a customer hasn’t paid on time. An AR aging report can help you easily track outstanding invoices right in your accounting software – or create an Excel report you can track manually, if you prefer.

Perhaps the most important tip for encouraging prompt payment is excellent communication.

When you follow up on a late invoice, explain why it’s important to receive timely payment in order to run your business effectively. Ask when you can expect payment, and agree on a date.

If the money still isn’t forthcoming, offer to negotiate a payment schedule as a next-to-last option – before you have no choice but to contact a collection agency.