Delayed payments can cause serious problems for small companies that don’t have a huge reserve of cash to dip into when they need to cover expenses. The very survival of your business depends on managing your small business cash flow and getting paid promptly, so it’s important to make sure clients give you what they owe as quickly as possible.
Here are five ways to receive payment faster as a small business:
- Use auto-reminder tools
If you don’t have time to personally follow up on invoices, you can use technology to pick up the slack. Accounting and invoicing software is available that will automatically send an email to customers who owe you money. You can also use pre-made templates for phone calls and emails to accounts that are past due, which will streamline the collection process for you.
- Offer pre-pay discounts
Everyone likes getting the best possible price on the things they buy. If you want to incentivize customers to pay you quickly, give them a percentage off for paying in advance. A discount of anywhere between 5% and 15% is common, but you should adjust it based on the type of project, its cost, and your customer’s budget. Note that pricing and discounts are subject to legal requirements. So be sure your pricing and discounting complies with applicable calls.
- Accept as many payment methods as possible
Most businesses are limited in the amount of ways they handle payment. Some companies only take checks, for example, which greatly limits the speed with which payment is rendered. Consider using technology like card readers and payment apps to handle a variety of different payment methods. As long as you aren’t investing a ton of time or money to do so, taking different kinds of payment methods can only help your business get paid faster.
- Clearly denote your terms of payment
If you want customers to understand and abide by your terms of payment, you have to consistently remind them. Put your payment terms on work contracts, invoices, quotes, and any other pertinent documents that customers will see. The more times you remind customers of how long they have to pay you, the more likely it is that they’ll pay promptly. Set your payment terms early in the process, and politely remind customers of the terms any time the matter is brought up when talking with them.
- Work with a reputable home repair plan contractor network
When you take jobs from a high-quality network for contractors, you don’t need to worry about getting paid fast enough. The best of these organizations understand that their valued network contractors depend on getting paid quickly, so they make it a priority to do so. The best contractor networks can provide you with payment a few days after you complete work for them. They’ll also provide you several options for payment so that you can choose the method that works best for your company.
Looking to learn more about working with a home repair plan contractor network and how it can help your cash flow? Check out HomeServe USA’s contractor portal to learn more about the benefits of working with the nation’s top network of home repair contractors.
