Small business owner: Should you just keep chasing payments?

Offering clients a variety of payment options will help assure that you can mark more invoices "paid" sooner.

Offering clients a variety of payment options will help assure that you can mark more invoices “paid” sooner.

By Henry Brown

Payment is a touchy subject for many businesses starting out. In fact, money is just a general worry. The main concern so many small companies in their difficult early period is getting enough money to cover their outgoing payments. The struggle of invoicing a client for good provided or services rendered, no matter how quickly you completed the work, means that you could potentially be waiting on an important payment, one that will get you out of the hole. This is a constant worry for business owners, especially small companies living a hand-to-mouth existence a lot of the time. Is there a way to remedy this?

The most obvious method we can all benefit from is laying out the terms with our clients before any work has been done. It is a common practice made by big business because they are in a position to set out a few ground rules before starting to work, and these terms may include payment upfront for a job beforehand. It may sound like a risky strategy for smaller companies, especially those that need the money. But it’s much like psychology. If you show your desperation, you could easily be taken for a ride by these clients. The fact of the matter is that you should not be backwards in coming forwards. Being firm when it comes to payment before any work has been done is one method that can work, or if you are dealing with a client that can only pay on a certain date, then set up a balance transfer for that date. It secures payment, but it also is a definite barometer of trust between the client and yourself. You can leave yourself wiggle room for payments if it is necessary, but by sending the message that you are firm in your negotiations will make future dealings with them a lot easier.

Increase payment options

The other method is to increase your options for payment. The tech world is becoming more efficient with each passing year, and if your business can only accept cash, it leaves you at a disadvantage. The majority of credit card processing services allow you to you accept payment online, via transfer, an integrated payment method via software, or in person (static and on the move). If we increase the amount of options to pay, it makes the process easier for your client. It also leaves no stone unturned if you are in that tricky position when you have to ask for payment. Their systems are down? You can take payment in person. They can’t come to you? That’s fine, with your mobile payment software you can come to them and you’ll be there in 20 minutes!

It is all about clever negotiation between the parties. Payment is never an easy thing to discuss when you are in the beginning stages of business dealings, where you are trying to find your footing and a working method that aids you and the client. By having multiple options available and being strong in your negotiations, you’ll find yourself chasing what is owed you less often.

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Henry Brown is an online marketing executive. When he isn’t talking shop he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.

 

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