Home » Blog » 4 Ways to Get Your Customers to Pay Invoices Sooner

4 Ways to Get Your Customers to Pay Invoices Sooner

featured_-x-ways-to-get-your-customers-to-pay-your-invoices-soonerThe struggle of late invoices is a common problem in many service industries.

In fact, 79% of small businesses suffer from late payments in some form or another. In some studies, 48% of businesses pay their suppliers late, and 30% increase borrowing in order to compensate for the loss. Shockingly, 10% turn down new business because of it.

While field service businesses thrive off of personally relating with their customers, the downfall of being friendly and relatable is that it can be difficult to call in debt or late payments.

But getting late invoices paid is a must if you want to continue to grow. Here are a few strategies every field service business can use to make sure you get invoices paid on time.

These 6 email scripts will help you get paid faster:Click Here

shutterstock_1790844770

Adjust Your Attitude

The average invoice is paid 22.5 days late, but 62% of businesses spend fewer than 10 hours per week addressing the issue.

Part of the problem relates to the idea that being in a customer-centric, “friendly” service industry means you can’t get tough on payments.

With this in mind, it’s important to stop feeling like you’re being “rude” or bothersome by asking for late payments, collecting those payments, or sending repeated notifications to customers who fail to comply.

You should also consider outsourcing your collections if payments are significantly late. Studies show that only 17% of businesses outsource their credit control over, and 47% of the business that don’t outsource have concerns that it might impact customer relationships.

But, if you don’t ask for payment, no one will. Keep this in mind the next time you go to ask for a late payment. You did the work, and you deserve to be paid so that you can provide the same excellent customer service to the next person.

shutterstock_92166049

Send Effective Invoices

There are plenty of reasons why people don’t pay, including forgetfulness or lack of funds. But surprisingly, one of the biggest reasons for late payment is confusion about how to pay, when to pay, or how much is owed.

Some of these issues are the result of poorly designed invoices. In one survey, 49% of CFOs cited invalid or missing purchase order information on invoices as a reason that their customers did not pay their bills.

The good news is that this problem is easily solvable. To improve your chances of receiving payments, your invoice should include:

  • Payment Date – A forgotten payment date risks sending the message that you don’t care when you get paid, which may result in you not getting paid. It also means you have no legal recourse to collect payment, so make sure you include a due date on every invoice.
  • Services Provided – Including a detailed list of services can help clarify any issues for a customer that isn’t making payments because they’re not sure what they’re paying for, or if the invoice price was different than a quote. You should also include unit prices next to each listed service so customers can see a breakdown of their total bill.
  • Invoice Number – Invoice numbers help businesses track invoices, but they can also be helpful for customers to reference for their own accounting purposes. You can also use invoice numbers on reminder emails to let customers know which payments are overdue.
  • Late Payment Charges – If applicable, itemize any late payment fees and display them alongside the remaining fees. Make sure everything is clearly labeled and easy for the customer to review.
  • Payment Instructions – Billing terms and methods of payment are also a good idea to include directly on the invoice itself. The more payment options you can provide, the more likely you are to get paid. If a customer can’t pay right now or can only pay in part, include instructions for arranging a payment plan or alternative payment strategies to ensure you have some money coming in.

Remember that a professional invoice should never frustrate or confuse customers, so make sure your invoices are clear and easy to read as well.

shutterstock_143568622-1024x683

Make Contact the Right Way

Once a customer has missed a payment, you will most likely have to follow up with them in person, by phone, or by email. This is the part of the collection process that most businesses dread, but it doesn’t have to be frightening, if you know what to do.

Here are a few tips for contacting customers the right way to encourage payment:

  • Be Polite, But Firm — No matter how far overdue the payment is, try to remain professional and avoid using a frustrated tone. If you can’t be professional over the phone, send an email or delegate the task to a custom service rep. Remember that “professional” doesn’t mean “pushover”. You still deserve to be paid.
  • Make Multiple Attempts – Sending one invoice is rarely enough. You may need to send reminders on a weekly or even daily basis as time lapses without payment. Again, you’re not being rude by sending frequent reminders. Make attempts using as many sources as possible.
  • Ask for Verification – If you’re having trouble verifying that a customer received their invoice, include a statement in your follow-up emails along the lines of, “Please confirm you have received this email by replying.” If they don’t reply, you may have to try another method to reach them.
  • Use Templates and Scripts – Many people shy away from making “collection calls” because they’re not sure what to say. Having a script or template for email and phone conversations can reduce awkwardness and help you communicate effectively in these situations.
  • Offer Payment Plans – Not every business can do this, but if you find that customers are having a hard time affording your services, you could offer payment plans in place of a large, one-time payment. If it’s a frequent problem, you may also want to consider targeted a different audience that can afford you.
  • Offer Payment Options – While some clients want to pay by check, credit card or using an online payment system, others prefer direct deposit. Opening up your payment options gives clients every reason to get you paid on time.
  • Automate the Process – The easier you can make the process, the more likely they are to pay. Consider automating email reminders and offering solutions for customers to manage their own accounts. Clients using Fieldwork software, for example, can provide customers their own portal where they can view and pay invoices directly through the system.

The more options you can provide for customers to pay, the more willing they may be to pay on time. Remember that by sending frequent reminders, you’re not being “rude.” You’re simply requesting payment for services rendered.

thank-you-letter1

Reward and Recognize

You might also consider rewarding customers who do make payments on time, or even offering other forms of recognition or incentives to get paid.

Even something simple like a handwritten “Thank You” note, a quarterly gift, or a discount on services for paying on time can go a long way.

You can even use recognition in your email reminders to get paid. In fact, a recent study found that a simple “please” or “thank you” can increase your chances of getting paid by 5%.

While you don’t want to get into the habit of “bribing” customers (after all, you’re providing a service), you can “grease the wheels” with a little old-fashioned kindness. It will give you control while also providing you with opportunities to maintain top-notch customer service.

Free download: 6 Email Scripts To Ask for Late Payments:Click Here

Final Thoughts

While getting paid on time isn’t always the easiest task in the world, it’s also one you shouldn’t shy away from. Make sure that customers understand that paying you is not a courtesy, it’s a requirement.

If you’re struggling with frequent late payments, make sure that your invoices include any and all pertinent information, including things like how and when customers should pay.

Make sure you follow up immediately after the service is performed, and don’t forget to follow up on a frequent basis (automation can help with this).

And remember, a little please and thank you can go a long way.

Posted in

Beau

Don’t take our word for it.

Try Fieldwork free for two weeks. No credit card required.