Today we are going to continue our money talk and how to get cash faster from your customer.
Last week we noted how many business owners feel uncomfortable talking about money. They let fear get in the way of running their business profitably and efficiently. Remember, talking to your customers about money does not make you look needy or unprofessional!
The following 4 tips will make it easier to collect payment from your customers. Getting paid is essential to running a successful business!
- Make payment so easy that they can do it on the spot – How or when your customer pays depends on the industry and client you are servicing. If you are servicing large institutions, you most likely will not get paid on the spot. However, if you are a plumber and providing services to a residential home you can expect to get paid at the time of service. Make sure you understand the customer expectations in your industry and then make payment a no brainer. This may include accepting credit cards on your phone or with the click of one button on your electronic invoice. Do not complain about the 3% charge to accept the credit cards, build it into your pricing structure. Keep in mind that most people use bill pay through their banks, as they no longer have checks. This can delay payment for weeks. Be smart.
- Automate Recurring Payments – If your service or product is recurring, automate the payment. Customers expect auto payment and get agitated if they have to take additional time out of their schedule to make the payment. This not only delays payment, but it also makes it easier for clients to walk without knowing why. Auto payments can be done via credit card, as well as through Automated Clearing House (ACH payments come directly from your customers bank account to yours at a significantly cheaper price). Discuss with your merchant if accepting ACH is possible.
- Automate, Automate, Automate – You may say, “I’m not ready for this yet or I am too small to automate”. We beg to differ. We wear so many hats as a business owner that we should jump on anything that saves us time or makes our lives easier. Today’s technology has provided us with a slew of inexpensive options to help automate sending invoices, payment reminders, paying invoices and the overall management of the customer. You actually may already have this ability with the industry specific software you are utilizing. Dig into this even though you may think you are not ready.
- Manage your receivables weekly – this sounds like a pain in the butt, but life gets busy and customers sometimes forget to get pay. A friendly payment reminder a week after the invoice is due is better than a reminder a month after it is due. And remember not to let your emotions get involved. All parties understand and have agreed upon the terms.
At the end of the day, think about how you want people to do business with you. Take that information and consider the best experience for your customers. Collecting payment is an important part of your customer’s journey and it should be as seamless as possible.
You can do this! We will repeat our final statement from last week… Take a deep breath and stand firm on what you need to do to succeed!