It’s impossible to avoid debts in business. Perhaps a long term customer didn’t have enough funds with them the last time and promised to pay shortly. Customers who take longer to pay or vehemently avoid paying put your business at risk of running short of cash to manage regular activities. To avoid this situation requires knowledge of these 6 tips to ensure customers pay on time in 2019.

Do credit checks

Before offering credit, do research to find out whether the customer has the ability and willingness to pay. In addition, it’s better to offer credit to customers who have been supporting your business for some time but not new ones. Endure doing a credit check on the customer by talking to their past business partners. It would be a good sign if those partners have a good impression of the client. It can be a guarantee that you will receive your payment in a timely manner.  

Ask for money upfront

The sure way to avoid getting into trouble with customers who take longer to pay is by avoiding offering credit altogether. Let every customer know that you need prompt payment for your goods or services. If you’re excellent at what you do, some customers might even pay in advance. Ask them to pay at least half of the bill at the onset of the project. The other part of the payment should be payable on completion of the project.

Hire a debt collector

If you realize that some international customers vehemently refuse to pay, consider hiring global debt recovery services. Sometimes, this third party effect might scare the customer to pay your dues promptly. Luckily, reputable debt collectors take a percentage from the amount collected. This gives assurance about the services they offer. Sending a debt collector to go after your international clients is a strong message that you mean business and want to get paid your worth.

Prompt invoicing of clients

For those customers whom you offer credit, ensure to send them your invoice as soon as possible. Avoid waiting until the book keeper takes some time or your accounts department does the work at their own pace. Consider automating your invoicing so that invoices are automatically delivered on completion of a project or delivery of products.

Offer discounts for early payment

Consider offering discounts to customers who pay upfront or pay in time. It can be a percentage of the total amount on the invoice to work as a cost advantage. This discount for early payment might work as an incentive to make other customers pay promptly. The key is to have all customers invoiced in time to ensure they’re no excuse for not paying in time.

Keep a good rapport with clients

Handling customers mean creating a business relationship. This requires focusing on building good communication and understanding with them. For late payment of invoices, it will be easier to solve the issue amicably without denting the relationship. Additionally, maintaining a great relationship might help to avoid other issues from arising.

Bottom line

Debt is inevitable in business but the strategies above are beneficial in seeing that your payments are submitted in time.