How to Collect Payment From Customer: [10 Essential Tips]

Framing clear payment expectations in mind, before getting engaged with your client can be extremely beneficial. Be it anything, let the customer know. For instance, the payment system you follow, different payment options you offer, timings of the payment, interest and late fees on overdue invoices, etc.

Being clear and transparent about your expectations can help you avoid future disputes, and establish a strong foundation for a healthy business relationship.

The payment due date cycle differs from business to business. You need to decide on one specific pattern and follow it consistently. You might be the one preferring advance payment options, or payment at the time of invoice issued. It can even happen that you prefer taking half of the payment in advance and half on the completion.

Whatever it is, you need to decide the one that makes sense for your business and customers.

As said above, requesting payment upfront is the direct way to minimize the chances of non-payment. When goods are to be delivered, you can easily ask for advance payment, without any hesitation.

However, this is not the case with services. Here, things get simplified only where there is a degree of trust between you and your client. This is because services are often intangible, and clients may be hesitant to make full upfront payments without a history of successful collaboration.

When you accept payments upfront, it can help resolve many potential issues.

With the advent of technological innovations, creating and sending electronic invoices has been simplified. Also, the fear of misplacing the paper invoices has vanished. No more spending crucial working hours making invoices.

All you need to do is simply download the invoice sample template available, customize it in your way, add fields to include all the additional details, play with colors to match your brand, save the invoice, and simply share it via email with your client.

Diversifying the payment option to match your client's preferences can be a smart choice. Having various payment methods cannot only help you pay the invoice faster, but even make your business look legitimate. Offer them the flexibility to pay the way they want. It can be via cash, check, bank transfers, debit or credit card payments.

Offering discounts is one of the powerful incentive strategies, motivating your clients to pay promptly without any potential delays. Getting paid early is the only thing that is better than a paid invoice. And this can only be possible by offering discounts/incentives. Discount your clients either on the current invoice being billed or on the future service being rendered.

There might be a possibility that some clients might not be able to pay the whole invoicing amount in one go. Hence, just like the preferred payment method, offering a flexible invoicing schedule can better strengthen client relationships.

If the clients are given the leverage to pay in portions, you can win more quotes and substantially improve cash flow problems. Your clients will even appreciate the way you fit in their budget.

There are multiple reasons why clients don't pay you. It's not always the lack of money or bad intentions. The person in charge of making payment might have left the workplace or might be on vacation. If not, they might have misplaced the invoice.

Whatever the reason is, timely following up through e-mail is the most humble and polite way to approach late-paying clients. Emails are basically a good starting point for settling the outstanding payments.

Establish a systematic reminder system to politely and professionally remind clients of their outstanding invoices. Effective communication can often resolve issues and expedite the payment process without straining your client relationships.

After all the possible efforts, if you still encounter persistent payment delays, consider bypassing the usual channels and directly contacting the billing department. This approach can expedite the resolution of payment issues and ensure your concerns are addressed promptly by those responsible.

If the advertising department is the one responsible for making payment to you and they are not answering, you can directly get in touch with the finance department. Just ensure that you find out exactly who you should contact for invoicing payment.

Why are you simply behind streamlining the payment processing, when efficient invoicing software like InvoiceOwl, is capable of handling more than this? Integrating such automated invoicing software can free you up from all the tedious manual invoicing operations.