Get Your Invoices Paid Faster With These 10 Tips
Tired of slow-paying customers? Learn how to get your invoices paid faster with 10 tried and true industry tips.
If your company relies on invoices, you’re probably all too familiar with slow-paying customers. According to the popular accounting software Xero, “More than a third of small business invoices are paid late.”
Late invoices seem like an inevitable part of running a business, but they don’t have to be. That’s why we’ve created a list of practical steps you can take to increase your chances of getting paid on time.
Here are our top ten tips to get your invoices paid faster.
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10 Tips To Get Your Invoices Paid Faster
While you can’t make your customers pay you, you can encourage on-time payments with these top ten tips to get invoices paid faster, including knowing how to word invoices, when to send invoice reminders, what payment options to offer, and more.
Save Time By Sending Invoices Online
If you’re still mailing invoices manually, now is the time to start saving time and money by switching to e-invoices. Sending invoices online is easy, cost-effective and best of all — fast.
Instead of spending time printing invoices, stuffing envelopes, and waiting on the mailman, you can send your invoices to customers instantly. Your customers get their invoices faster, which means you get paid quicker. And you won’t need to worry any longer about whether your invoice got lost in the mail or sent to the wrong address. Most invoicing software programs offer invoice tracking so you can see exactly when your customer receives and views their online invoice.
When it comes to small businesses, time is money. But money is also money. With e-invoices, you’ll save both. While you may need to spend a small monthly fee on invoicing or accounting software, you won’t have to purchase envelopes, ink, paper, stamps, etc., and you can use your newfound free time for managing other more important aspects of your business.
Take a look at some of our favorite online invoicing options or continue reading to learn all of the perks invoicing software offers.
Offer Online Invoice Payments Options
One of the other great perks of using online invoices is the ability to accept online payments. When it comes to getting invoices paid fast, the key is to make it as easy as possible for customers to pay you.
That’s why payment processors are so important. They’re quick and convenient, and almost all invoicing and accounting programs offer multiple payment processing options.
According to the popular invoicing software FreshBooks, offering an online payment option significantly increases your chances of being paid on time; and according to Xero, companies that accept both online credit card payments and Paypal payments get paid 20 days faster than those that don’t.
To learn more about accepting online payments, download our free Beginner’s Guide to Payment Processing. If you’re already sending online invoices but aren’t yet accepting online payments, read our post The Best Payment Processors For Accounting Software.
Choose An Effective Invoice Template
Believe it or not, choosing the right invoice template can play a role in getting your invoices paid on time.
Most invoicing software programs offer multiple templates options. You want to pick a template that is attractive, simple, and clear to read. This includes choosing a legible, easy-to-read font like Arial or Helvetica (I usually shy away from serif fonts, like Times New Roman, as they are harder to read and often make the invoice look outdated and cluttered).
According to Invoice Ninja:
[An invoice] that’s colorful, distinctive, and attractive in appearance will stand out in their minds. This can help clients to remember your invoice and nudge them towards paying promptly.
Not only do you want an attractive invoice, but you also want an invoice that clearly shows:
- The invoice due date
- The invoice amount
- Your company’s contact and payment information
- The products or services the customer is paying for
- The invoice’s terms and conditions
Clarifying and highlighting this information makes it easier for your customers to know when and how to pay you, which can speed up the payment process.
Here are a few examples of strong, attractive invoice templates:
Pay Attention To Your Invoice Due Date
Choosing an invoice template with a clear due date is a definite step in the right direction, but you also want to make sure you choose the right due date.
Oftentimes, you’ll see invoices that say “due upon receipt.” This is a perfect example of what not to do. It doesn’t give a clear due date, which encourages late payments. Another term you often see is a “Net 30” due date. This means that the invoice payment is due 30 days after the invoice is sent. Some customers may not be familiar with this notation. Instead, be clear and specific. If an invoice is due 30 days after it’s sent and it was sent on September 1st, just say that the invoice is due September 30th. When customers have a set-in-stone deadline, they are more likely to pay on time.
If you want your invoices to be paid faster, also consider moving up your due date. If you typically have invoices due 30 days after they’re sent, try moving that up to 15 days. This way you are spending less time waiting on cash.
Offer Invoice Discounts For On-Time & Early Payments
You catch more flies with honey than vinegar, and invoicing is no exception. A great way to get your invoices paid fast is to offer a small discount for customers who pay early. Maybe consider offering a 5% or 10% discount for customers who pay their invoices in the first ten days. Everyone likes saving money, so those customers who are looking for savings will jump on the deal and pay their invoice quickly. While you may lose a small amount of your sale, you’ll receive cash faster, which may be more than worth it.
This option may not be for everyone or every type of business, but it is definitely worth considering if your business is struggling with cash flow due to late invoice payments.
Enforce Late Fees On Overdue Invoices
If incentives don’t work, you can also consider charging a late fee or interest for late payments. While no one likes to be the bad cop, sometimes you have to take drastic measures to receive your hard-earned money.
If you do go this route, be sure to clearly state your late fee policy on your invoice’s terms and conditions and send reminders to inform your customers that you will begin calculating interest or charging a fee if you don’t receive your payment in time.
Don’t Wait To Invoice Your Customers
Your customers can’t pay you if they haven’t been sent an invoice. That’s why staying on top of invoicing is one of the most important things a business owner can do. The sooner you send your invoice, the sooner you can get paid. Plus, customers are more likely to pay quickly for items or services that they just received.
It can be easy to become overwhelmed and fall behind on invoices. Luckily, there are tons of great invoicing tools out there to help automize your invoicing process. Nearly every invoicing software app allows you to send recurring invoices to repeat customers. Apps like QuickBooks Online allow you to autoschedule invoices in advance to help save time. And programs like Invoice2go offer great mobile apps so you can send invoices straight from your phone.
Send Invoice Payment Reminders
Another way to avoid late-paying customers is to send regular invoice payment reminders. Sometimes people simply forget and need a nudge in the right direction toward payment. Send an invoice reminder a few days before the invoice is due, the day the invoice is due, and a few days after the invoice is missed.
Hopefully, the first reminder will be enough to get you your payment. If not, continue sending email reminders and calling the customer on the phone. No one likes to chase down payments or be a nag, but it’s your responsibility to follow up with slow-paying customers.
One of the perks of invoicing software is that most programs allow you to create automatic payment reminders, which saves a lot of time. These programs almost always have an accounts payable report as well so you can view your customer’s outstanding balances without having to manually track who hasn’t paid yet.
Invoice Your Customers In Phases
If you run a project-based business, consider invoicing in phases. Instead of sending one giant invoice at the end of the job, maybe try invoicing once certain phases of the tasks are complete. Or consider charging a deposit for your work to discourage customers from avoiding payment altogether. This way, you can even out your cash flow.
Simplify Your Invoicing Process With Invoicing Software
When it comes to getting your invoices paid on time, invoicing software is integral. With it, you can send invoices quickly, automize your invoicing process, and encourage customers to pay quickly with online payments.
Here at Merchant Maverick, we highly recommend that small businesses use invoicing software at the very least, or purchase full-fledged accounting software to send online invoices and balance the books. In this post, we’ve already mentioned several of the great perks of e-invoicing and invoicing software.
Here is a full list of the reasons you should use invoicing software:
- To automate your invoicing process
- To send online invoices to customers
- To accept invoice payments from customers directly online
- To see when your customers have received and viewed their invoices
- To send automatic payment reminders to late-paying customers
- To construct default terms and conditions that automatically appear on every invoice
- To create default invoice email messages to make sending invoices faster
- To run helpful reports like Accounts Receivable and Sales by Customer
- To send invoices on the go with mobile apps
- To save on paper, ink, and time
If you a ready to take advantage of these benefits and simplify your invoicing process, here are the best invoicing software options on the market.
What If My Customers Still Don’t Pay Their Invoices On Time?
Instead of feeling powerless against late invoices, you now have ten tricks under your sleeve to help get those invoices paid faster (eleven if you count invoice financing!). Take action against slow-paying customers and start getting your invoices paid faster today.
So what happens if you try all 10 of these tips and you still have late-paying customers? There are several things you can do, but opting for invoicing financing is one of the best options.
With invoice financing, you can sell your unpaid invoices to a factoring company in exchange for immediate cash or you can use your invoices as collateral for a line of credit.
If you’re suffering from inconsistent or poor cash flow due to slow-paying customers, invoicing financing might be the perfect solution for you. Read our Merchant’s Guide To Invoice Financing to learn more or compare the invoice financing options.
Learn all of the options you available to you in our complete guide on what to do id clients don’t pay.