How to Encourage Prompt Payment

Encouraging prompt payment is at the heart of good cashflow management. Conversely, late payments by your customers can make your business vulnerable as you risk getting into financial difficulties.

So how do you encourage prompt payment by your customers? Read our top tips below for some practical ideas.

Although of course you cannot guarantee that your customers will pay you on time even if you implement these suggestions, you can certainly cut down on the incidence of late payments.

Use Your Invoices To Encourage Punctual Payment

1. Calls to action

Putting a clear call to action on your invoices can help to ensure speedy payment. In other words, rather than simply saying; “This invoice is payable on receipt” mark the date that payment is due clearly on the invoice.

2. Incentives

Offer favorable payment terms and incentives to encourage prompt payment. For instance you could try offering a discount to customers who pay your invoice by a certain number of days after it has been issued and before it is actually due. Even a discount of as little as 2 percent can encourage people to pay early.

General Advice

1. If someone has not paid you on time, do not be afraid to contact them to find out why. There may be a simple explanation such as them not having received your invoice.

2. If a number of customers owe you money, contact the people who owe you the most first.

3. Involve third parties where necessary.

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