#041 How and when to charge your customers

“ It turns me upside down. But how can they disrespect me like that? »

A 6DT customer.

Improve your cash flow

Sylvie can't take it anymore. Its cash flow is often negative. Every quarter, she prints the list of her overdue customer accounts.

One by one, she writes, texts or even calls her offending customers to remind them to pay their bills. Same observation. She realizes that this is the second or even third time she has contacted them for this purpose.

“ We go out of our way to deliver their projects. Even on tight deadlines, but they take months to pay. I feel like someone is laughing at me! » she told me, frustrated.

Perverse effect on cash flow

Unfortunately, small businesses that are slow to get paid are common. This can negatively affect your cash flow and create additional stress.

It's also hard not to take this issue personally when you're working directly with the client. Sometimes you help him out in a delicate situation.

Here are some ways to get paid faster, without getting caught up in the “drama”.

Clearly display your payment terms.

Make sure your payment terms are visible on each invoice. Although we all want to get paid the moment the customer receives their invoice. This is often inconvenient for the customer. The invoice must be sent to the accounting department. Payment must be approved. And businesses often make payments in batches on specific dates during the month. 30-day payment terms are often the standard deadline. But nothing stops you from asking for 15 days or offering 45 days. Be aware, however, that larger companies often have their own payment policies that you will need to agree to or negotiate.

Schedule automatic reminders for any late arrivals .

Few accounting platforms offer the ability to send reminders on the due date as well as before and after. If you are a QuickBooks Online ® user, take advantage of this feature. Schedule polite reminder emails. If you don't want to alienate your customers, give them a few days of grace before sending reminders.

Charge interest for late payments .

It is entirely justifiable to charge interest for payments received after a certain date. For example, you could charge 2% interest on unpaid invoices after 5 days. Digital tools such as InvoiceSherpa are very good for this task . If you don't use InvoiceSherpa, you could add these fees manually. Simply create a new product that you will name “Interest on late payment”. Make sure to include this condition on your invoice template so that your customers are always informed.

Take your payments directly from your customers' bank account

Yes, yes, you read that right . There is a service that allows you to debit money from your customers' accounts at any time.

Pre-authorized debits can be one-off, recurring or variable. Collect banking information from your customers, and configure everything in your software. You will no longer have to chase after them to receive your money!

To find out more: www.Rotessa.com , or simply, consult our blog for this purpose . What we like most about this tool is that it allows you to update your customer accounts! Long live accounting automation.

By automating your payment collections, you can reduce the number of unpaid invoices. Take a few hours to define and configure your conditions, and you will save time and peace of mind!

Contact a member of our team for more advice or help getting organized.