When your business provides a product or service to a customer or client you expect to get paid. Most businesses have struggled at one time or another to get paid for their work. If you are a small company, not getting paid for your services could be particularly detrimental to your business.
To make sure you are not left holding the bag, the Better Business Bureau offers the following tips to speed up the payment process:
- Sign a contract. This may seem obvious, but it is critical if you want to set payment terms up front. Do not rely on verbal agreements. Your contract should stipulate what you will do, when you will do it, and how much and when you will be paid.
- Decrease the amount of days in your billing cycle. While most vendors can take up to 60 days or more to pay up, there is no reason why you can not add a line to your invoice that reads, "Payment due within 14 to 21 days." Include a specific date for amount to be paid.
- Review your invoices. Are your invoices too generic? All invoices should include the client's contact name, the order number and the date the bill is due. If you are dealing with a large corporation, ask for a vendor number and include it on the invoice. It is often required before a check is cut. You may need to consider adding a late payment penalty charge to your invoice.
- Request a portion of the payment up front. Depending on your business, you often can request part of the payment in advance.
- Bill your clients more often. Instead of billing every 30 days, try billing every two weeks.