You may be spending a lot of time looking at your process for billing and collections. You may also be in search of a better way to gather the data you need for your tax accountant. You can expedite payments from your customers by improving the way you bill. Read on for our top 5 tips:
1)Checks Are a Thing of the Past with AutoPay– For recurring charges with customers, set up automatic payment from a credit card or debit card linked to a checking account (ACH). For a transaction fee, automatic withdrawals are deducted from a client’s debit or credit card – worth the initial investment of the service rather than continually seeking payment.
2)Keep Credit Cards Current – Before running a credit card for a service, double check expiration dates to avoid payment rejection. Even better, try to convince customers to switch to ACH since bank accounts don’t expire.
3)Payment on Work Completion – For service and installation invoices, we’ve found that printing “Due On Receipt” prompts faster payment than on extended terms. A due date is still required to properly track the project time, but hopefully the urgency in the request provides expedited payment. For added payment retrieval, try a convenient online payment option (e.g. Alarmpayments.com).
4)Two Ways to Courtesy Call– Give those customers who are 15 days late with payment a reminder phone call. During the call, request any name or address changes to avoid future delays. Go a step further and ask for an email address to send a copy of the invoice. Email is becoming a staple in business transactions as it ensures billing receipt and allows for easy collections if necessary.
5)Late Fee Loyalty Program– Consider using late fees, but look at them as bargaining tool to get paid faster. For unpaid accounts over 30 days, make the late fee a $3 or $5 minimum or apply a percentage for larger dollar amounts. Remember to waive late fees if needed as customer retention is key; don’t lose a customer over a late fee.
Small changes to the way you bill can make a big difference in how quickly you get paid. Consistent billing, persistent follow ups and offering multiple ways to pay — by check, ACH debit, Visa, MasterCard, Discover, American Express, and online through a secure payment portal helps make for easy transactions and healthy client relationships.