Raise your hand if you want to get cash faster from your customers. Raise your other hand if you have an emotional reaction to money issues.
In our twenty years of experience, we have found that talking about money can get really uncomfortable. It doesn’t have to be that way!
One of the strongest emotions new business owners face is FEAR. Fear of pricing their services or products properly, fear they won’t have any clients, fear that people will complain about their prices, simply fear. This bleeds into collecting money from your customers and running your business profitably and efficiently.
So many business owners feel uncomfortable discussing payment for their product/service. They fear it makes them look needy or unprofessional. This is absolutely not true and only holds you back from getting cash faster!
Let’s discuss 5 things you can do today to ensure you get cash faster as a business owner. DO NOT let fear get in your way!
Customers want to understand how the process of your service/product works and this includes payment. Share with your customers why your product/service is better than your competitors and the value it adds. Once they understand how the product/service will improve their lives they will be happy to hear about the payment terms.
Signed Engagement Letter or Contract
You need and want an engagement letter or a contract signed by you and the customer. This will outline the responsibilities of each party. This is business folks; a handshake or verbal agreement is not good enough. Clients willing to pay you do not mind signing a contract/engagement letter. Those not willing to sign, probably will not pay you. Whether you have a contract or engagement letter is really a conversation you should have with your attorney. Make sure that you meet with an attorney to create or review documents needed to ensure payment. You will want these documents to be in order if you have to take further action for payment.
Create an invoice to get paid faster
The invoice needs to be easy to read so that the customer has everything they need to pay it immediately. Be sure to include the following items on your invoice:
a. Your business name
b. Your business’s contact information: address, phone number, email, web address.
c. Your client’s name and contact information.
d. Terms of the invoice as agreed upon in the contract. According to Freshbooks.com, use “days” instead of “net” to get paid faster.
e. Payment Due Date needs to be listed even though you have the terms spelled out.
f. The date of invoice
g. The date of service
h. Invoice number
i. Itemize out the list of services or products purchased. If you have offered a discount, make sure to list items out at full price and then discount at the bottom. This is important, so that your customer understands the value they are receiving. This can also be done when donating services.
j. A note of gratitude, whether it be a simple “Thank You” or something more. Connecting with your client and communicating that you are grateful for them helps you and your business.
Send Invoices ASAP
You can deliver a phenomenal experience to a client and then mess it up with the last piece; invoicing. As business owners, we want to service our customers first and worry about ourselves last. Doing so leads to late invoicing and customers start to question the integrity of the service or product you delivered. Make time daily to send invoices.
Stick To Your Estimate
A surprise invoice for a client dilutes the customer experience and can result in taking longer to get paid or possibly not getting paid at all. If something unexpected happens that increases the agreed upon price, talk to the customer as it is happening so that they can be a part of the discussion. If you simply forgot to include something on the estimate, you may have to eat it. This really depends on what the situation is. Communication is the key here.
As business owners, we will not let fear get in our way. We will talk to our customers about money, set clear expectations, and get cash faster!
If fear is holding you back, you are doing yourself and the world a disservice. Take a deep breath and stand firm on what you need to do to succeed!