How to Get Customers to Pay on Time
How to Get Customers to Pay on Time
One of the main problems that many accounts teams face is getting customers to pay on time.
It has been reported that the sum of late payments in the UK rose by 80% at the end of 2019 to £23.4bn.
This is a shocking figure and clearly states the need for a process in place to stop this from happening.
On top of all the other financial issues that businesses encounter, this can form a very difficult situation.
This can prove even more challenging for small businesses or self-employed individuals that have to undertake this themselves whilst managing cash flow.
Why is Managing Cash Flow Important?
Managing cash flow is one of the hardest tasks for all businesses, as its longevity is ultimately determined by this.
Small businesses will struggle with this more than others due to the limited nature of resources in such firms.
A business owner may need to prioritise bringing in more opportunities instead of keeping a keen eye on its accounts.
There are many things that can affect one’s cash flow, and the financial pressure caused by this can result in the stopping of trade entirely.
The Federation of Small Businesses revealed that more than 440,000 small businesses could be forced to close as a result of late payment issues.
Tips on How to Get Customers to Pay on Time
The simplicity of providing a service and getting paid upon completion has long been replaced by invoice payment date culture.
It is common for payment terms on the invoice to be between 30 days and 60 days, depending on the relationship with the customer.
In some situations, the payment date of an invoice can be as long as 90 days after it has been issued.
When money is due into your bank account, your invoicing system will notify the customer to prompt payment.
When a customer decides they do not want to pay on time or at all, no amount of credit control measures can stop this.
However, following our expert tips will help you to at least prevent this from occurring and the effects it can have on your business.
Get the customer to pay upfront
Getting a customer to pay upfront for the goods or services they are being provided is, of course, the best way of getting paid on time.
Receiving payment upfront means you will, obviously, get paid faster and will put an end to late payment issues with customers.
Update your payment methods
In the modern world, there are many different ways that payment transactions can be carried out. All you need is a phone to be able to send money to someone, and this can usually be done in seconds.
We recommend taking advantage of the long list of payment methods and implementing them into your invoice procedures.
This will provide your customers with more ways to pay, reducing the chances of not providing the money when payment is due.
Negotiate payment terms at onset
Discussing payment terms with your customer before you provide them with a service is a good way of getting paid on time.
It is important to get these signed, as if they fail to pay on time, you have a document to go back to them with.
Terms and conditions are a part of every daily business transaction, with these summarising when to pay and how much is due. These can also outline any additional costs if you are not paid on the due date.
Before sending the invoice to a customer, they will know what their payment obligations are.
Make sure you invoice on time
One of the most common ways to get customers to pay on time is simply to make sure you invoice on time.
Whilst this is an obvious point to make, it will surprise you to know how many businesses fail to keep up with their own accounts duties.
If you are up to date with your invoicing, the customer will know you are serious about getting paid on time.
How to Get Customers to Pay on Time – Frontline Collections
If you have tried the above methods and are still experiencing the same problems, you need to contact a professional.
Instructing a debt collection agency, such as Frontline Collections, is the best solution for when invoices become overdue.
Since 2005, Frontline Collections have been known as the leading private debt collection agency in the UK.
Our specialists have a demonstrated history of recovering late payments for our customers, providing an average success rate of 90% and above.
As a result of our industry expertise and experience, we know how to get customers to pay on time.
How to Get Customers to Pay on Time – FAQ
What should I do if my customer has not paid on time?
Knowing how to get customers to pay on time can be a task in itself, and when this happens, it is beneficial to have a solution ready. Frontline Collections are the best option for recovering overdue amounts of money.
What is the effectiveness of using a debt collection agency?
We provide our clients with a success rate of 90% and above on undisputed debts, further demonstrating the calibre of our services.
Does it cost a lot of money to recover a debt from a customer?
Our debt recovery service is low-cost, meaning we only require our clients to pay a commission fee of as little as 8%.
Can my money be recovered from an international debtor?
Not only are we the leading debt collection agency in the UK, but we can also recover debts from overseas. No matter where your debtor is based, we can recover the fees that are owed to you.
Do you help businesses and individuals recover debts?
Yes, we recover debts for both small businesses and individuals across the UK and the world. Regardless of the industry sector, we can help you get the money back that is owed.