The words ‘clients’ and ‘not paying’ go together like Converse and stupid socks, or Jacob Zuma and Nkandla: no matter how much you want these things to just stop already, they remain the status quo. Running your own business, you’ve no doubt come across your share of clients from hell.
Along with ridiculous demands and unrealistic deadlines, often clients just refuse to pay. Why? I honestly can’t answer that one, but I can help you avoid this annoying problem (it’s super ‘annoying’ when a client payment makes a debit order bounce, right?).
Here are my top three methods to get clients to pay on time (you can thank me later):
- Get partial payments whenever you can
Most clients won’t want to pay your company 100% upfront for work that’s yet to be done. I get that. But there are ways to lock down partial payment before you commit to the hours of blood, sweat, and tears from the accounts department. These include:
- Get the client to pay a non-negotiable 50% deposit before starting a job, then the other 50% on completion.
- Use a milestone approach, where the client pays once specific, pre-defined outputs have been reached – this works well for larger projects, which you can break into chunks of checkpoints. Tick off a milestone, get paid, and tick off the next.
- Include late payment terms on each invoice, such as late payment fees that increase exponentially with each day of non-payment that goes by. Works like a dream.
- Make payment painless or automated
An easy trick to get clients to pay is to make payment hassle-free. Sounds simple enough, but so many businesses have complicated payment methods. Instead of clients having to do the equivalent of sending you a DNA sample, make use of efficient payment methods such as:
- PayPal (and you don’t need an FNB account to withdraw funds: this article explains everything).
- Payfast (accepts credit-, debit- and cheque card payments, instant EFTs from six major SA banks, and is Zapper compatible).
- Xero (this accounting software allows payment services like ‘Pay Now’ buttons to be added to online invoices, read more here).
If you have retainer clients, debit order mandates are a no-brainer. They can be a mission to set up though, so we suggest you outsource that to an accountant.
- Outsource your accounting
Speaking of outsourcing… if clients still aren’t paying it’s time to bring in the big guns. But we don’t mean Bedfordview’s Serbian mafia, we mean us: Your Accountant. We’re based in Parkhurst and offer a full suite of financial services – at a fraction of the cost. We tailor our services to what you need, plus, we have a number of clients who run their own businesses – like you. So we know the drill, and we know all about clients not paying.
Need help? Contact Your Accountant to keep track of your business’s finances – so you can focus on bringing in more paying business.