June 20, 2020
Getting paid on time for some businesses can be crucial! Many of those offering accounts receivable can attest to this. These 4 tips could help increase the percentage of your accounts paid on time, as well as reinforce consumer loyalty.
Reminding your clients politely that their payments are due in the near future is a great way ensure that invoice dates have been clearly stated; and gives the added bonus of memory reinforcement. In other words, if you consistently remind your client of their upcoming bill a few days before each payment, there is a good chance that over time they will begin to pay on, or prior to the day it's due. Of course, every client is unique, and may have a variety of reasons why they may pay late, but a gentle reminder is enough for most people.
As stated before, the more consistent you are, the easier it is for your clients to get into the habit of paying on time. In addition to the initial "Due Date Reminder", make sure that the reminder is sent on the same day every month, (or just along equal intervals of time if the payment cycle is not monthly). If you can, sending the reminder at the same time on that day is even better. Consistency is key! and the more constant the conditions, the higher up on their To-Do list you will rise.
Unfortunately, there will always be clients who just cannot seem to pay on time. Whatever their reasons are, giving these types of clients an array of payment options ( ie: Card, Check, Wire Transfer, etc.), could help make payments easier, and more convenient for them. The more options you have, the more flexible and accommodating you will appear!
Late fees can often provide an extra incentive to ensure prompt payments. Be sure to notify your customers in advance if you plan to implement late fees. It's also a good practice to accept waiving the late fee portion of an invoice for first offenders. Typical late fees start 15-30 days after an invoice is due. Many states have limits around how much you can charge for a late fee, be sure to check your local requirements before adding late fees to your Accounts Receivable processes.
If you have experienced success with other methods of getting your accounts receivable paid on time, please share in the comments. We would be delighted to hear from you!
BY Alyssa LeBlanc
BY Max Golovnia
BY Alyssa LeBlanc
Armatic Co-founder and CRO