I’m sure one of the most frustrating and annoying parts of any business is having to send invoices to clients and still get the cold shoulder from clients or get late payments. Sometimes, after taking the time to carefully complete the task that is required by the client, putting in the work to ensure that turn out the best results and yet not getting paid even after sending an invoice. This is like a nightmare for any business person, and it can be a very stressful process. 

Some clients only pay after finally sending several invoice notifications and emails. A survey conducted by Barclay revealed that three out of five businesses (58%) across the UK are waiting around for late payments from clients. The process can be very tiring and make the entire business process stressful for the business owner. 

However, in this article guide, we are going to discover the best solutions to this problem so that business owners can get paid by clients on time by using the right invoice and applying some other strategies. 

Why do Clients Make Late Payments? 

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I’m sure most business people have asked this question at one point or another after encountering a difficult client or having to resolve a difficult situation with a client that stems from payment issues. The truth is that there are several reasons why clients do not pay up on time, even after receiving several invoices. These reasons could be the fault of the clients, but other times, they stem from the business person. 

Some of the reasons why clients pay late include 

1. Payment terms are unclear.

A very important factor for successful business interaction between people is clear and concise communication. One of the problems most clients encounter is unclear payment terms. Sometimes business owners neglect to add the payment terms to the invoice so the client is clear on the terms of the business. 

When the payment terms are not clearly stated in the invoice, it leads to confusion or sometimes disagreements between the client and the business owner. This type of argument, which can potentially lead to delayed payments is considered an avoidable mistake. They can be avoided by ensuring that the terms of the agreement are clear and concise, so there is no room for any form of confusion. 

As a business person, it is vital to add the preferred payment terms to the invoice so the client can understand and follow through rather than default due to ignorance. 

2. Not sending a professional invoice

Although most business owners would disagree with this the truth is that the perception created by the brand plays an important role in even how well clients pay for the service. Clients tend to neglect or pay less attention to less professional brands, and one of the ways to avoid this is by paying special attention to the quality brand perception created in the minds of the clients. This can be achieved by carefully curating everything about the company that interacts with clients to speak professional service, including the types and quality of invoices sent. 

Designing invoice templates from scratch can be very tedious and stressful, especially for business owners that are not very design inclined. However, the internet has made things much easier and there are several invoice template online that can be customized to fit any business type.  

3. Clients forget sometimes

Believe it or not, some clients just simply forget they have a payment to make for a service that has been completed for them. It is understandable that a lot of people really have a lot going through their minds and sometimes just simply forget to make payment for services rendered. 

In some cases, they get the invoice and plan to make payment, but something comes up and they forget again. This is the reason why business owners are advised to try to reach out to the clients with reminders, email notifications, etc to ensure the client is reminded of their payment commitments. 

For clients like these, the best approach is to send payment reminders regularly between intervals to ensure that it remains at the top of the client’s mind to make payment. 

4. Incorrect payment details. 

This is a common error that is encountered in almost every business setting. Typographical errors could occur during the invoice design which could go unnoticed. And after the invoices are sent out these errors, could lead to payment delays for clients facing difficulties.

The payment details might not be incorrect sometimes, it could just be that the payment platforms have network issues or internal errors that could lead to the payment failure.  

Some of these errors are unforeseen and out of the control of the business owner or the client. In order to avoid situations like these, small business owners are advised to add multiple payment options when sending payment invoices to clients. Adding multiple payment methods acts as a buffer in the case of wrong payment details. 

5. Some clients are just negligent. 

Different clients come with different personalities, even in the business world. Encountering a difficult or negligent client is almost unavoidable because being in business requires interacting with different personality types, some of which might not be so favorable. 

Some clients just have the habit of not paying up on time or not even paying at all for services rendered. In such cases, the best approaches usually involve taking legal action or adding late payment fees to the payment terms to encourage swift payment. 

How to Get Clients to Pay Overdue Payments Faster 

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1. Constant communication with clients

If after sending clients invoice notifications, they seem to not pay on time, the best way is to keep constant communication with the client. Sometimes business owners decide to leave clients alone and assume they’ll pay up in time, but it is not an advisable approach. 

Continuously communicating with clients through calls, text messages, etc. can go a long way to getting the clients to pay up overdue payments. In cases where calls prove not to be effective, you can continuously send payment reminders so that the client is reminded of their overdue payments. A simple approach to sending invoice reminders regularly is to add them to the invoice schedule app. 

2. Try to send the invoice as early as possible.

Due to the plenty of work that business owners are confronted with, they sometimes tend to forget to send out some important notifications, such as invoices, on time. Sending invoices early is another best practice to get clients to pay on time. Business owners tend to get carried away with work and end up forgetting to send invoices to clients on time.

The delay can linger for weeks or months after the job has been completed, and the longer the delay in sending the invoice, the longer it will take for the client to pay up. 

Therefore, it is advised to send the invoice as early as possible to the client immediately after the job has been completed so that the client can also pay on time. Although keeping track of all these activities can become overwhelming for a business owner, there are some invoice scheduling apps online that can be used for easy work.

3. Adding multiple payment methods 

As earlier stated, one of the reasons clients might make late payments is because of an error in payment details that could come from the business owner. Payment channels can have some issues, such as network instability or just an error from the platform, causing payment delays. 

Using just one payment method is not advisable for any serious business because it leaves a lot of money on the table. To rectify this and ensure there is no fault from the business owner, it is best to add multiple payment methods. 

Aside from ensuring the client pays on time, using multiple payment methods helps the client choose the most suitable payment method for them. This also helps to make the business look more professional with several payment options. 

4. Add late payment fees 

Some clients can be very adamant and negligent about paying for services on time. These clients just prefer to wait until the last minute to make a payment or just need something to cajole them into paying. Since there are no late payment fees, they can hold up payment for weeks, some even months. However, adding a late payment fee can act as a way to cajole them into paying up on time. 

A late payment fee could be a specific percentage that’s compounded monthly. What this means is that, for instance, if the client delays payment for a month, at the end of the month a percentage of the principal capital is added as a late payment fee. And since this continues monthly, the percentage is added to the new sum. 

Although late payment fee conditions like these should be added to the payment terms sent in the invoice so the client is aware of the terms of the agreement. 

Conclusion 

Every business owner likes getting paid on time for their services after getting a successful job done. However, some unforeseen issues can arise, leading to late payments from clients even after several invoice notifications. 

There can be multiple reasons responsible for late payment from clients, and some of these, if not handled properly, can very well lead to conflict between the client and the business owner.