No matter what industry your business falls in, you’ve experienced late paying clients. Not only is this a nuisance for your administrative team, but it also is detrimental to your business’s cash flow. Rather than getting overwhelmed and frustrated with your clients, take actionable steps to help motivate your clients to fulfill their payment.
If you are like most, you’ve tried just about everything to get your clients to pay their invoices. Before you give up, here are 4 actionable steps to take when your client hasn’t paid their invoices.
1. Prevent Non-Payments For New Clients
Even though you are working to get current clients to pay off their invoices, it’s important to stop the problem before it gets out of hand. As we have talked about before, there are many steps to make your invoices more effective so they get paid faster. Take all or some of these tips into your new clients invoices to help stop this problem now.
2. Contact Your Clients Directly
Although this may not be the most favourable option, it’s necessary. Contacting your clients directly will put pressure and responsibility on the person that is providing the payment, not an assistant or other middleman.
If you’re noticing that your emails aren’t being responded to, it’s time to take a different approach. Start calling them directly to get them on the phone. If that doesn’t work, try visiting them at their place of work. It’s important to remember not to harass your clients, but to give them frequent nudges so that they remember to pay you for your hard work.
3. Stop Fulfilling Their Order
If these methods aren’t giving any real results, it’s time to stop fulfilling work for them. This will send a shock wave right to your client to make it clear that they need to fulfil their invoices with your business.
It is important to remember that this is a last resort. If you are dealing with a new client, stopping their order after a few days of non payment can send the wrong message. Use your best judgement before stopping any order or job to ensure that your business’s reputation isn’t in jeopardy.
4. Use Invoice Finance
Invoice factoring will help your business bounce back from the many days of little to no payment. With invoice factoring, a factoring company will step in and purchase your outstanding invoices for up to 96% of their amount and give you the cash in as little as 24 hours.
Not only will this help you get paid for your outstanding invoices, it will also help you build a strong, stable source of working capital so you can:
- Manage payroll
- Update equipment
- Bid on more jobs
- Hire more employees
- Expand into new markets, and more
- With invoice factoring, you also will never have to worry about the collections process again. Because the factoring company purchases your outstanding invoices, they take on the responsibility of collecting payments from your clients, freeing up your time.
To discuss the funding options available to your business. Please do not hesitate to contact us on 0161 280 4220 or lynnew@regencyfactors.com
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