By The Old Gods And New We Shall Be Paid!
As we see the first quarter coming to a close, it’s time to tackle the ever-present mystery of client payments. While most of us would prefer improving employee benefits or planning the next team retreat, without healthy cash flow, all the good things we want to do become a battle. And the worst is when we commit to our team and can’t come through because of sluggish receivables. If only there were a magic spell to keep clients paying on time. Well, maybe this isn’t a fantasy?
(Fair warning: I’ve been playing a lot of Baldur’s Gate 3 and my writing may… well, you’ll see.)
Ensuring Client Payments Arrive on Time
Adventure isn’t just in video games; it’s also present in how we run our businesses. Yeah I put us on the hot seat. But it’s true. Many of us are nice when it comes to business because we’re people pleasers. And that’s awesome, never lose that. But we’re also leading a business and our people need us to level up. So, with a sprinkle of strategy and a dash of technology, we can transform our payment processes from wishful thinking into a well-oiled machine. But how? I’m glad you asked.
Understand Your Client: Company procurement can be a tricky labyrinth to navigate based on the type of company you're working with. From nonprofits to universities to startups to large enterprises, every type of company has a different approach to how they pay vendors. Review your client base and trends regarding how they pay you. Learn from them and map out the best way to get paid based on your understanding of their operation. And don't be afraid to ask, they probably want it to be easy too.
Meet with the Treasure Keepers: At the beginning of any client relationship, ask to meet with the humans of procurement. Ask how you can make their lives easier. You may be surprised to find they aren’t the trolls you’ve heard about. Also, get specific with them. Learn what their payment cycles look like. When is their check run?
Spellbinding Clarity: Start with crystal clear payment terms. Like the rules of a secret society, make them known and understood from the beginning.
Bill Swiftly: Cast your invoices immediately after your services are rendered. The faster you send them out, the faster you'll see returns. And avoid the dreaded milestone payments above all else. If you must use milestones, make sure payment is due upon delivery, not approval.
Automated Reminders: Blame that cursed technology for sending those evil reminders to your clients, gently nudging them that payment is due (or overdue by the gods!).
Payment Portals: Open a gateway for clients to pay through various channels. The easier it is, the quicker you get paid. If you want to remove obstacles, consider offering clients an EFT option for a small percentage off their bill.
The Magic Touch: Sometimes, a direct conversation can work wonders. A friendly call can unearth any hidden issues and remind clients personally that they like you and you need that shiny gold to keep moving up the mountain.
A Creditworthy Character: Peer into the past before taking on new clients. A quick credit check can reveal a lot about their past downfalls.
Discounts for Early Arrivals: Offer a small discount for early payments. It's like leaving a treasure map for clients to follow, leading them right to timely payments. Gonna say it again for those in the cheap seats, help them with an EFT option so they’re always early!
Late Fee Hexes: Sometimes, a deterrent spell is necessary. Make sure clients are aware of what awaits those who pay late. And enforce it! Again, technology can act as armor protecting you from what was automated. Oh my! A late fee? Why yes, that is the policy and the system won’t let us back it out. (If you’re lawful good this may not be an option for you.)
Legal Shielding Spells: Know when to escalate things. Having a legal framework in place can protect your business and ensure you’re not left in the lurch. And possibly some collection service henchmen if it’s time to go to war.