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Blog » Business Tips » Invoicing Clients: 10 Approaches That Get Results

Invoicing Clients: 10 Approaches That Get Results

Updated on January 17th, 2022
Invoicing Clients

Getting paid — let alone on-time — has long been a problem for business owners. Large corporations can shoulder the burden of delayed payment. However, small and medium-sized companies can’t go that long without payment. Late payments and unpaid invoices can create serious cash flow problems for a business. In some cases, payment delays can shut a small business down. There’s got to be a better way for invoicing clients.

Business owners may think they can’t control getting paid on time. After all, they do their part. They invoice the client in a timely manner and give them at least 30 days to settle up.  Many business owners don’t want to be too aggressive out of fear of losing the business altogether.

Although you ultimately can’t control when customers pay you, there are tactics that increase your chances of getting paid. From embracing online invoicing to laying out payment terms early on, here’s a look at some of the more effective strategies.

1. Go High-Tech With Invoicing Clients

The Internet has made all sorts of functions freelancers need easier to manage and that is particularly true when it comes to invoicing. Automating the process of issuing invoices can ensure you won’t forget to bill a client. The longer it is delayed on your end, the harder it will be to get paid.

The Internet is full of invoicing tools — some offering basic features and others integrating with your data to stay on top of all your bills. These services provide business owners with invoice templates, the ability to sync payments with the business’ financial records, make payments, and to monitor and manage late and unpaid invoices.

2. Create Clear Billing Invoice Terms

Even if you are a one-person shop, it’s best to have clear and transparent payment terms toe define how you will invoice clients. If you are ambiguous about when payments are due or send your invoice on different days each month, it can create confusion with your clients.

When bringing on a new client, lay out your expectations clearly. If you expect payment within 45 days, say so. You want to include which payment methods you accept, perks of paying early if you have any, and the due date.

3. Reward Early Payments

A surefire way to get at least some of your customers to pay in a timely manner is to reward them for doing that. Let’s say your invoices are due within 30 days of receipt. Offer customers a 5% discount if they pay within 15 days. You can easily do this with several different cash apps. On-time payments can get a smaller discount while late payments get hit with a fee.

Or for instance, if your customers pay in installments, you can offer a bigger discount if they pay the entire bill upfront. Doing so will alleviate the costs and time wasted tracking down late payments.

4. Charge Clients Late Fees

Nobody wants to upset their clients and customers, however, if they are paying late and it’s impacting the business, there may be no other choice. Penalizing customers who pay late may seem aggressive, but it can go a long way in getting paid on time.

Business owners instituting a late payment fee policy have to clearly lay out all the rules. That includes how its charged — a percentage of the invoice or flat fee — when it’s triggered, and what happens if the bill goes unpaid for an extended period of time.

For instance, if the bill is past due for 90 days, you may report the customer to a collection agency.

5. Make It Easy for Clients to Pay You

For lots of people who are late paying bills, it’s not because of a lack of resources but rather a lack of motivation. Making it as easy as possible for them to pay you will greatly improve client invoicing results.

To remove late payment excuses, provide a variety of payment options for your clients. Whether its direct deposit, a mobile app, a check, or a credit card, providing lots of options will ensure speedier payments.

6. Follow-Up With Payment Reminders

Life is hectic with information and bills coming out businesses and individuals from every direction. It’s easy to forget to pay a bill, and that’s where follow-up and payment reminders come in. The online invoicing platform can be set up to send regular payment reminders to customers, while DIY business owners can get them out on their own.

Sometimes, one reminder is all a client needs, while other times it may take a few more reminders to get them to take action. Send an invoice reminder a few days before its due, again on the day it is due, and again a few days after the due date if the payment hasn’t been made. If the reminders don’t elicit a response, pick up the phone and give the client a call to remind him or her.

7. Set a Due Date and Stick With It

Consistency is everything, and that’s true of the process you use for invoicing clients.  The more regular your invoices are, the better. That’s why you need to choose a due date and keep it consistent for all future invoices. If you want to get paid quick, set the due date for two weeks after you send the invoice.

If you are comfortable giving your customer more time, set the due date for 30 to 60 days after the invoice is received. Either way, ensure that the due date is clearly stated on the invoice. The last thing you want to say is “due upon receipt.” That provides leeway for the customer to avoid paying on time.

8. Know Your Customers

Timing is everything when it comes to getting paid on time. If you know when your customers tend to pay their bills each month and time your invoice before that, you increase your odds of getting paid early. Some companies will process all their payments on the 15th of each month. If you get your invoice in on the 16th, you will have to wait for an entire billing cycle to get paid.

9. Itemize Everything

Questions about a bill often delays payment. If you don’t itemize every expense and display it prominently, then the client may hold up the payment while waiting for an answr. But, if the invoice clearly states project work, then it can speed payment.  It may require more time upfront, but it’s worth it if it reduces payment time.

10. Make Sure You Know Who Pays the Bills

Sometimes human interaction is all it takes to get a late bill paid. Picking up the phone and contacting the right person will usually yield good results. But in order to make that happen, you need the correct contact within the organization.

Nothing can be more frustrating than getting the run around because you don’t know the proper person to contact. When signing on new customers, make sure to ask for that information.

Final Thoughts

Invoicing clients ranks high on the list of headaches business owners face. However, employing smart invoicing strategies can alleviate some of the pain. At the end of the day, consistency gets results. None of these strategies will work if you don’t do it regularly.

Peter Daisyme

Peter Daisyme

Peter Daisyme is the co-founder of Palo Alto, California-based Hostt, specializing in helping businesses with hosting their website for free, for life. Previously he was the co-founder of Pixloo, a company that helped people sell their homes online, that was acquired in 2012.

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