7 Ways to Help Clients Pay Your Invoice on Time

You invoiced your client three weeks ago … but you still haven’t received pay? Trust us, it happens to everyone, but that doesn’t make it any easier on your bank account.

We’ve written extensively on this blog about the process of collecting on unpaid invoices. We’ve offered tips for getting invoices paid, keys to getting invoices paid, how to mitigate unpaid invoices for preserving cashflow, and even how to create invoices that get paid faster. The common thread through those pieces is that they consider what you as the business owner should be doing. It’s great advice, but what if we shift the focus from you to your customer— what you can do to help clients pay on time more regularly?

We have tips for that, too.

A Quick Lay of the Land

The average office worker receives approximately 121 emails per day, and that’s on top of meetings, brainstorms, informal discussions, and all the actual work. It’s entirely possible for an invoice from you to get lost in the shuffle and left unpaid.

So how do you make sure your invoices don’t get overlooked?

1. Make paying easy to remember

First and foremost, slow pay isn’t an indication that the client didn’t like your work. Sometimes a client does see your email, but they get busy or distracted and forget to pay. How do you get their attention again? A funny, witty or creative reminder could catch their interest and stay in their head long enough for them to take action and pay your invoice.

Not a writer? Seek out a freelancer to write 12 short notes for you (one that you can use each month). You may also want to tweak the design of your invoices so they stand out visually (just ensure they’re still easy to read and understand). Some invoicing software, including Sunrise by Lendio, allows you to create a custom template. Try your hand at art or find a great freelancer that can help develop a design to reflect your brand’s personality—and some scroll-stopping visuals.

2. Make paying your invoices easy

The more payment methods you offer, the more likely your clients will be to find one they feel comfortable using. They may also be more likely to pay promptly because it’ll be easy for them to do it quickly.

Standard options, including credit cards, direct deposit, or check, should be part of your mix, but also consider add more, including PayPal, Stripe, or Square can’t hurt. Most accounting apps and software help you integrate these payment methods into your interface. If you have a client who persistently pays late or that pays with a different method each month, you may even ask if there’s a payment platform that they would prefer to use. Who know, you may find a new option that both you and your client love.

Also, if you work with big projects, consider mitigating invoice sticker shock by splitting the invoice into installments. It’s a common practice for service providers working on large projects; it usually involves a percentage up front as well as benchmarks or milestones for collecting the balance. Do, however, ensure your client understands that there are more bills to come.

3. Make forgetting to pay a bad move

Of course, there’s always the hand-slap, a.k.a., the late penalty. This easy-to-generate tactic can be quite effective.

The basis for this approach is the concept of “loss aversion,” a theory suggesting people prefer avoiding losses over acquiring gains. In other words, it’s better not to lose a dollar than to win a dollar. Here’s how Psychology Today explains loss aversion:

Consumers are more responsive to a price increase than to decrease. For example, from July 1981 to July 1983, a 10 percent increase in the price of eggs led to a 7.8 percent decrease in demand, whereas a 10 percent decrease in the price led to a 3.3 percent increase in demand (from Putler, Daniel S. 1992. “Incorporating Reference Price Effects into a Theory of Consumer Choice.” Marketing Science11 (3): 287–309).

The threat of parting with more money than was originally agreed upon could be enough to get a client to pay their invoice on time. The penalty structure should be fair and extremely conspicuous on invoices and your website—surprises build poor relationships!—and should also be clearly stated in automated reminders. Remember, however, to follow through, too. If you state that you have a late fee but then don’t charge it when a client pays late, you may be reinforcing bad behavior, unless, of course, you work something out with the client (because you the kind of person you are).

4. Make paying early seem like a bonus

On the flip-side, you could try positive reinforcement: an early-pay discount.

A Claremont Graduate University study found that paying less than market value for a product or service caused a boost in oxytocin levels. The same study also found that the amount of money saved isn’t as important as the act of saving itself. Go figure.

If you think having 97.5% of your invoice paid is worth more than chasing down 100% of it for months, consider adding a reward for paying on time or early is a good idea for you. If you choose this route, ensure you state it clearly on your invoices, too. It can be difficult to convince someone to part with money early if you don’t tell them there’s a reward for their exemplary behavior.

5. Make payment a condition of delivery

Withholding the product or service forces clients to pay their invoices on your terms. They won’t be able to ignore the invoice or put it off for another day—especially if they’re working on a strict project timeline. Sometimes, however, this can be difficult to achieve. If you need a client to approve a review copy of custom artwork, you may be able to electronically protect the asset and then remove the protections once the bill is paid in full. If, however, your business is paving driveways and you accept payment at completion of the project, withholding the product can be more challenging.

6. Make it a point to recognize clients who pay on time

Let your clients know you’re aware of their payment and show your appreciation. This kind of recognition goes a long way in the relationship-building department, which will also help get more invoices paid on time. If you can spare time to send a custom thank-you each month, that’s ideal. If not, set up automated thank-you notes in your invoicing app—and set a reminder for yourself to change the text of the automated thank-you monthly so the sentiment feels more personal.

While it’s difficult to make a client to pay when you want the payment, you can implement processes into your own workflow that encourage payment. Integrating one or more of these approaches may help your clients pay you on time more regularly, and help you keep your cashflow where it needs to be.

 

Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.