Quite often, the smaller the business, the greater the importance of getting paid in a timely fashion. To help entrepreneurs stay in business, FreshBooks small business accounting software is sharing their five tried and true strategies for getting invoices paid fast.
#1: Write Crystal Clear Contracts
Create a foundational contract template that explicitly states prices, terms for payment, terms for revisions and additional work, and a "kill" fee in case a project is canceled. Then, customize the cover page to describe your agreed-upon services.
#2: Require Deposits
For significant projects or high-priced services, it's fair to require a deposit at the onset — some businesses ask for 50% — to protect your cash flow.
#3: Stick to An Invoicing Schedule
You won't be paid on time if you don't invoice on time. Choose a day — and stick to it — to invoice every month, both for completed work and for ongoing projects with milestone payments.
#4: Automate Reminders
Putting your late payment reminders on autopilot avoids awkward conversations and the fear of nagging.
#5: Enforce Late Fees
Research shows interest rates incentivize clients to pay on time, but be fair (less than 10% interest). Include the exact breakdown of late payment fees in your contract, and the updated balance in your reminders, so clients understand clearly what they owe.