Get Paid Faster: Guide for Small Businesses
Unpaid invoices and late payments are an obstacle for all businesses, but for small business owners, waiting to get paid can be the difference between success and failure. According to a recent survey, 92% of small business owners have had to deal with late payment issues. As a result, 37% of these merchants reduced their own salary to accommodate for slow payments.
Slow payments can lead to lost money, vendors, and cash flow that could be used on other initiatives such as hiring new employees or buying new equipment. But every business owner can implement some practical tips to get paid faster, improve cash flow, and grow their business.
6 Tips for Faster Payments
- Automate Invoices and Follow-up Reminders
Having a system that automatically send invoices means that customers can receive and settle bills in a timely manner. These invoicing solutions make it easy for clients to pay with Pay Now features, built-in payments, and saved cards on file. It also can send automatic reminders and regular notifications to keep payment dates top of mind.
- Offer Flexible Payment Terms
Giving clients discounts to pay early, customized payment plans, or auto-pay options makes them happier. Whether customers are rewarded for early payment, have specialized payment plans to meet their needs, or can set and forget payments each month, they have options that suit them which means better cash flow for the merchants they are paying.
- Incentivize Early Payments
Offering an incentive, such as a discount or free merchandise, is an easy way to get customers on board with paying early. Clients like to feel rewarded, and this is an easy way to gain their business. For merchants, it is very important to be clear about each incentive so customers can understand.
- Charge Fees for Late Payments
For merchants that experience excessive late payment issues, this can be a solution. Merchants need to be clear on their terms and also understand state laws to see if they can implement fees when their clients pay late.
- Accept Multiple Forms of Payments
Offering many ways for customers to pay is a great way to get paid faster. When clients have convenient payment method options, such as ACH, online, or digital methods, they take advantage of it which means merchants get paid faster. Offering these types of payment forms can increase sales and provide clients with secure payment options.
- Integrate Payment Processing and Accounting Software
Using a payment processing system and a separate accounting software can make it difficult for merchants to have a clear picture of their financial situation. Tying these systems together allows merchants to better understand who is making late payments and then adjust to eliminate those issues. Integrating these two systems automates processes, streamlines operations, and improves cash flow for every business.
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