There are tons of creators and business owners in today’s world. You may even own a business of some sort or you may know someone personally who owns one. When it comes to operating one, it is no easy task and one of the most blood pressure rising tasks can be dealing with payment and invoices for clients.
Whether mid-size or small, if you have employees working under your company then you have probably faced the dilemma of having to payday and have not gotten full payment from clients. When faced with this situational issue, there is an alternative that you may not know of called, payroll factoring.
Payroll factoring is a system that lets you exchange your invoices for a loan for either the bank or another lending agent to pay your employees. To make they exchange equal for both parties, they collect the money from the invoices. In order to get this process started, the agency runs your business through the required credit checks before they can agree to lend you the funds. Once you agree to the terms and conditions, the contract begins. If this already sounds like too much to do and you would rather avoid dealing with lenders and credit checks, then there is another option.
Get your invoices paid faster to you to prevent the issue from occurring. Though it is not guaranteed, because you simply cannot make a client. Although, there are seven tips you can do to make things easier for them and hope that they will pay sooner than waiting till the last minute.
For starters, you can bill the client immediately after the services are done. Never wait to send an invoice as this will only put things behind. One way to make this a bit more easier is to prep an invoice, if possible. If you know exactly what services you are providing and the price you intend to charge, prepping will make it much easier to send out as soon as things are executed.
The second thing is to use net 10 terms. Invoices and terms will vary by industry, but the most typical is net 30 which give the customer a full 30 days to make a payment. Provide a net 10 or 5 which will give the customer about 5 to 10 days to pay. This will of course be a bit easier with newer clients as they do not know your policies just yet. When it comes to recurring customers, send out a letter, phone call or email 30 days before the changes go into effect. During the time services are being provided, be sure to keep in contact with them to keep confusion down.
Third, send reminders. People get busy and thoughts are diverted to other tasks. If necessary, set reminders for yourself to follow up with your clients. Some actually appreciate it.
If business is booming and there is an influx of invoices to send out, get help. Why not invest in software that sends them out automatically. It’ll make your life a bit easier.
Number five, initiate late fees. When you aren’t paid in a timely manner it can hinder and hurt your flow of business. The thought of working for free creeps in along with other things. Corporations send out late fees to get customers to prioritize payment. Why can’t you do the same?
The sixty way to get your invoices paid quicker is to pose a rewards system. Example, those who usually pay on time are able to get a 10 or 15% discount on their service.
The seventh and final way is to go back to the square root and consult with an invoice factoring company. At least with this method, you don’t have the headache of constantly dealing with the clients who haven’t paid.