Steps to get paid faster from customers

Written By Gary Spirer Published February 10th, 2010

Is your cash flow stagnant? Do you feel you are not getting paid from customers in a timely manner? Read on to find out how you can get paid faster.

Step 1.

*Discuss with your customers about payment terms before doing work *

Negotiate the payment terms prior to completing any work for a client. You may even want to consider getting paid 40% of the total amount of an invoice prior to supplying a good or giving a service to customers to ensure payment. If the payment terms not written down and agreed upon upfront, a customer can renege on payment terms after the work is complete, leaving you without payment.

Step 2.

* State that you require prompt payment *

Tell you customers upfront that you require prompt payment or to be paid in a timely manner. Let the customer know that you will complete the work in a timely manner and thus expect prompt payment.

Step 3.

*Find out if the customer has financial constraints *

Determine upfront if a customer can pay in full before starting the work. If the customer mentions that he or she has financial problems, negotiate a deal to get even partial payment or that you’ll complete the work in parts until paid in full. In like manner to layaway plans, be flexible and allow customers to pay as they can.

Step 4.

*Learn how much each customer payment cycle really costs your business*

Know what customers really cost you. If a customer lags behind on payments, the cost of invoicing and follow-ups are more than the actual job itself and thus cost the business. On the other hand, know which customers pay promptly based on their history of payments.

Step 5.

*Send out invoices via e-mail and quickly*

Send out invoices quickly in order to ensure that customers have the net 30 days to pay. Also, be sure to send out the invoices electronically, if possible, and follow up to ensure the customer acknowledges receipt. When sent by mail, you cannot be sure the customer receives the bill without incurring the added cost of overnight mail.

You’re on your way! Remember, by working with the customer for payment, you can be sure to get paid. Be direct and clear with your customers and they will respond accordingly.

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