Money can be an awkward topic to bring up around people, especially if those people owe you money. For every small business, there is an owner who hates dealing with the money side of their company. Unfortunately, money is what keeps you in business, so you have to learn how to get your customers to pay you quickly and consistently. This is your livelihood, and without money coming in, it is worthless to you. Small businesses may struggle with steady cash flow, but there are certain things you can do to ensure that your customers pay you for the service you provide.
Don’t Drag Your Feet
Have you ever had a customer miss a critical payment of yours? If you have been in business long enough, the answer is surely a resounding yes. Everyone has experienced that moment when a client doesn’t pay. You sit back and wonder if it was just a critical mistake, or if it could possibly mean something more. The biggest problem that small business owners face is that they drag their feet. When hit with a missed payment, reach out to your customer immediately. While it may have been an honest mistake, it is much easier to deal with it as it comes rather than try and deal with it weeks or months later. Keep following up with your customers to ensure their payments stay on time.
Different customers like to pay in different ways. Lots of customers do not carry cash, so adding credit card payments can increase the likelihood that you get paid on time. While you may pay a small processing fee with credit cards, it can save you the time and energy of trying to track down cash payments from customers. People like having choices. Giving them multiple ways to pay lets them feel like they are part of the transaction process.
A large mistake that many small business owners make is how often they invoice. Some people choose to invoice once a month. This is far too sparse. Invoicing at the end of the month when a service was provided in the first week is confusing and unproductive. Making sure that your invoices are sent right after your service is provided keeps your business running consistently. By invoicing customers right when your service ends, you ensure that you get paid immediately. People forget when things happen over the course of a month.
It is important to build relationships with your clients. When you form a human connection with them, they are much more likely to follow through on their payments. Reach out to your customers and learn who they are and why they want your service. Forming a friendship with them can help you service them better, and they feel better about paying someone they connect with. Don’t be a name on their computer screen, let your customers get to know you and your business in the best way possible. When payments default or skip, this relationship helps you to call them and ask what went wrong. Never underestimate the power of forming a relationship with your customers.