1) Create a solid contract.
Agreement: Clearly outlines what work will be done.
Payment Terms: Clearly states how much and when you'll be paid.
Consent: Both parties agree to these terms before starting the work.
Protection: Agreement Acts like a promise, helping avoid payment issues later.
e.g. Before undertaking a job, ensure agreement with the client regarding the scope of work, payment terms, and deadlines. This proactive approach helps prevent confusion in the future.
2) Modernizing Payment Systems
Adopting Modernization payments will help you.
Speed and Efficiency:
Reduced Transaction Costs:
24/7 Accessibility:
Enhanced Cash Flow Management:
e.g. RTGS/NEFT/IMPS/ECS/NACH/UPI
3) Send a detailed invoice in a timely manner.
Sending an invoice is essential to ensure on-time payments from your clients, as it will serve as a formal request for payment that clearly states all the details, including the amount owed, the due date, and the accepted payment methods.
e.g.: After finishing a job, quickly send a bill with all the details - what you did, how much they owe, and when to pay. It helps you get paid on time.
4) Don't Hesitate to ask for overdue payments. Just follow up regularly, and you can use automated emails and WhatsApp reminders.
Make sure to remind clients about payments before they're due. If they don't pay after the first reminder, consider calling them politely. You can also set up automatic reminders through email and WhatsApp to make it easy for them to remember.
e.g.: Utilizing cloud-based accounting software, such as Zoho, NetSuite, Oracle, etc., can assist you in sending timely reminders.
5) Creating A royalty rewards
A rewards program helps customers pay bills on time and builds a positive relationship. When customers feel appreciated, they are more likely to pay promptly and continue doing business with you, creating a successful partnership.
e.g.: Consider organizing an annual award function where you can extend invitations to both customers and vendors, recognizing and rewarding their contributions.
6) Set Credit limit in your business
Set a credit limit in your business, don’t give more credit benefits to your customers, inform your customers that our credit limit is up to (e.g., 1 lakh)
e.g.: DHL will ask if your payment amount cross more than one lakh DHL team will ask you PTP (Promise to pay letter) And if payment is due, they deactivate the account.
7) Share detailed ledger statements regularly (additional point)
Sending regular statements with clear transaction details helps you get paid faster, improves communication, builds trust, and quickly solves any issues, making payments smoother for everyone.
e.g.: Every month, show customers a clear summary of transactions. It helps them understand and trust the process, making it easier for them to pay on time.
Conclusions:
Getting paid on time by your clients is one of the essential things to maintain your business operations, as accepting payment timely from your clients will help you manage your cash flow more effectively.
Prepared by
Madhu M
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