Cash flow is critical in any business venture. It is what keeps your business going and moving because, without it, business operations stop. Your business partners, creditors, employees, staff, and yourself will be negatively affected. Moreover, all your efforts to run the business will be wasted if you have no return on investments. Or simply put, no income means no more business.
Thus, it is necessary to know some of the easy and effective ways to collect your clients’ payments. These ways do not have to be complicated because clients or customers do not want anything complicated. And trust me, your clients want to pay you. But they want it to be hassle-free. And even if they do not want to pay you right away, you must know that you have the final say. So check these five effective ways to collect payments from your clients.
1. Ask for Payment in Advance
Asking for payment in advance means asking for the full price even before you render your service or deliver the goods. This is the easiest way to ensure payment. You simply have to inform your client that you need the amount before doing the job or performing your obligation as the seller.
This is not complicated as it appears to be because you only need to be straightforward. This is supposed to be comfortable and practical, especially when you know your capacity and have a good history when it comes to your business. If you are known to produce results as promised, you will indeed possess confidence in asking your client to pay in advance. There will be no hesitation in your part because you know you can satisfy your client’s needs.
2. Demand Partial Payments
Of course, no matter how certain you are of your capabilities to perform with your client’s request, some clients cannot pay you in full yet until they see results. Or maybe, they do not have that cash, unfortunately. So the solution to that is to demand partial payments. It’s a win-win situation for both of you because you are not obligated to perform your duty since you are only paid partially.
However, you also have to be upfront in demanding partial payments from your client to be informed that they have to pay you first, even only partially. Otherwise, they will get the wrong message. They will think that they can pay you only after you are done with your job. The choice is yours. You can ask for a 50% or 70% downpayment. That way, you will not be aggrieved, and your client will indeed proceed with the transaction.
3. Demand Payment Before Delivery
The situation here is different from the two ways mentioned above since this means that the goods are about to be delivered to the client who bought them. You will simply inform your client that the goods he ordered are ready for shipment or delivery unless your client won’t pay. That way, you won’t have to waste effort, time, and money because you will get an assurance that you won’t be left hanging by your client.
You can do this by sending an email or text message to your client at least three days before the delivery date so that your client can prepare in advance with his payment. There will be no problem with this set-up since it is crystal clear that no delivery will happen if your client won’t make payment.
4. Offer Payment Options
Your clients appreciate various payment options for easy and fast transactions. Your clients will automatically look at your business’s payment options before making purchases. It will be useless for them to spend time making appointments with or orders from you if they are not agreeable to the payment options. They like trouble-free and smooth payment methods. So if you want your clients to proceed with the sale transaction, you should provide some.
For instance, you can offer cash on delivery payment methods. This method is simple because you get paid upon delivery of the goods. Another is providing an automatic credit or debit card payment. This method means that you will automatically charge your clients’ purchases each month to your client’s credit or debit card.
Given the circumstances right now, one of the best payment options so far is the text to pay service. This payment method is convenient, easy, and secure because you can collect your clients’ payment from their device. Using this method allows you to simply send your clients’ invoices directly via text with a personalized message. It speeds you up from collecting your clients’ outstanding obligation. And your clients will appreciate this method too since it’s easy and convenient.
5. Add Penalties for Late Payment
Adding penalties for late payment promotes on-time payment since your clients do not want to pay unnecessary fees. And on-time payments determine your business’s success since the income generated from your clients is the bread and butter of your business. Your business depends on its cash flow. Thus, you only have to notify your clients in advance of the penalties for late payments before selling or offering your services.
Collecting payments from your clients is supposed to be comfortable and stress-free. Any business won’t thrive without an effective collection payment method. Hence, you won’t have any problem with these ways. And you won’t also have to worry about your business’ survival. Therefore, learn from these ways and have fun doing business with your clients.
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