The scenario may be familiar… You won the business, you’ve done a fantastic job, everyone’s happy, but you don’t get paid on time. There’s nothing more frustrating, especially for new start-ups, small businesses, sole traders and freelancers, than customers who consistently pay late.

8 simple but effective ways to help you get paid on time

But there are ways to encourage clients to pay their invoices on time, and good practice from the start can pay dividends for both sides…

Be clear from the beginning

Nobody likes talking about money, but it does help if you’re straight from the start. So be clear about your payment terms, deposits, discounts, penalties, etc. Write them into contracts or your terms of agreement, and be sure everyone has (signed!) copies before you start work.

Create clean, uncluttered invoices

Invoices aren’t thrilling to create, and they’re even less thrilling to receive.  So make the process as straightforward as possible by using a template with a clear total, due by date and payment terms. Using an online invoicing system makes invoicing quick, simple and creates less paperwork all round. You can even set up automated reminders for clients who have a habit of paying late.

Offer a discount for early payment

Everyone likes to save money. Giving your customers an incentive to pay early (it doesn’t have to be much, say 2.5%) makes it far more likely you’ll get paid before the due by date. It’s worth shaving a tiny fraction off the invoice if it keeps cash flowing. Just be very clear on the terms of the discount, how much you’re offering and what the deadline is.

Charge a penalty for late payments

If offering a discount is a carrot, adding a penalty is the stick. Nobody wants to pay more for goods or services than they have to, so adding a penalty for late payments is another option. Again, don’t make it too much –2.5% of the total invoice is probably enough. And be clear on the terms of the penalty and when exactly it becomes due.

Offer different ways to pay

Everyone likes choice, even when it comes to paying invoices, so giving your customer a choice of payment methods is always a good idea. Even if you just stick to cash, cheque or bank transfer, allowing clients the flexibility to choose how they pay can smooth the process for both sides. 

Add a Pay Now button

Make it easy for your customers to pay on time (or early) by invoicing online and putting a prominent ‘Pay Now’ button on the bottom right of the page. This visual prompt is often enough to get clients to pay immediately, while the invoice is in front of them, rather than having to remember and search for it at a later date.