Setting terms of payment
Getting paid by your clients on time is a dilemma business owners constantly face. Here is a proven technique that can help speed up the process.
It's all about setting expectations. You should always communicate your terms of payment to your customers. The right time to do that is as close to when you make the sale as possible, preferably immediately after you've made the sale, or just before they sign. This takes almost no effort on your part, but it pays big dividends.
Your customers may disagree with you about terms, and suggest different ones. No problem. You should agree on terms that you are both happy with. And, since you are willing to give in a little on the terms, you have the right to emphasise that you really would like to be paid on time. Customers won't mind this because you are both being up front about what is expected.
Make sure you put your terms on your invoices. This is just one more part of setting expectations. Here is the wording we'd recommend:
- "Payment due on DATE X please", or
- "Payment due within 20 calendar days of the invoice date please."
This whole process of setting expectations takes very little time, and can often just be done in writing (on the invoice, or in the contract you have with your customer), yet it is often overlooked as a great way to get paid faster.
