Invoice payment terms are an excellent way to ensure you get paid on time. But, most organizations fail to get them right as they don’t invest in modern solutions like best online invoicing software for your businesses. Gone are the days when you needed to prepare long documents and then spend a bomb on postal costs for sending invoices.
Nowadays, most businesses send invoices electronically via online payment software, and they are settled within 7 days. The ones using 30-day terms are inviting troubles and a poor cash flow. So, if you are someone who works day and night to meet client deadlines, there is no way you should not be paid within 7 days of your work.
1. Know When You Will Get Paid
While it seems like a no-brainer, payment terms defined using online invoice payment processing software will leave no room for errors, so whenever you are making contracts, make sure you discuss it beforehand with clients. This is done for two purposes: to protect your business and to build smooth relations with clients.
A good example of comprehensive payment terms involves having a fine balance between quick payments and avoiding troubling your clients. While your goal is to get money fast, building long-term client relations is your primary goal. But, make sure you don’t make their challenges your agenda and wait for payments for months together. Also, invoice on time as your client will have several invoices to pay, and if they have a cash crunch, they will pay the ones that are due soon or charge a late payment fee.
2. Ensure A Streamlined Payment Process
You must have a say in how your customers pay you for your products and services. As a result, having payment terms is a must.
When defining payment gateways, make it super convenient for clients and also list down your preferred methods. While there are many factors associated with payment methods, make sure you pick one that aligns with the expectations of both parties.
3. Make Them A Part of Your Contract
Make sure you lay down all your payment terms in your online invoicing software before you begin work with any clients. Most clients are open to dialogue and would love to know your expectations and put theirs too. Once you reach common ground, record them and mention them with all invoices.
Also, when you list out payment terms on both your client contract and invoices, you develop a legal standing if your client fails to pay you. While you don’t need to run to the court every time, you’ll need to work out something if phone calls are ignored and emails are not read.
4. Smooth Cash Flow
One of the major challenges small businesses face is getting paid on time. Tools like online payment software can help you set the right premise and expedite the entire process to help you stay at ease and not worry about cash.
3 Ways to Improve Payment Terms Using Online Invoice Payment Processing Software
You might look at your payment terms and think you have covered everything, but revising them from time to time will be the best. Since the business landscape is constantly changing, here are a few things you would want to consider.
1. Keep Them Short
If a client wants to settle an invoice in 30 days, write “net 30” on your invoice. Keep your terms clear, short, and to the point to prevent communication issues with your online payment software.
2. Use Polite Words
Make sure you write thank you and please at the bottom of all your invoices. Besides, 89.61% of invoices are paid faster when you use a please and thank you. So, make sure you are super polite and even use an online invoicing solution to record this.
3. Be Flexible and Realistic
Clients are business owners that and they wish to pay you on time. So, it is not necessary to put pressure on them. Besides, not all businesses have that healthy cash flow to processes invoices as soon as they receive them.
In this case, they cannot even handle the interest you will charge for late payments. So, make sure you keep a record of all these details in your online invoice payment processing software and work on establishing solid communication with your invoices.
Asking for your payments seven days after completing your work is a great way to get paid on time. But, the first thing you need to do is set your payment terms, store them in your online invoicing software and then discuss them with your clients. Openly communicating your expectations is the key to getting smooth relations and cash flow.