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How to Minimize Late Payments

Finding clients can be hard enough. But getting them to pay on time can be another battle. A single unpaid invoice can cause problems for your business. Multiply that amount, and you have a real struggle. Because of that, it is important to do what you can when accepting credit cards for small businesses to minimize late payments and their impact on you. Here are some simple strategies.

Be Prepared

It is important to be prepared for late payments. Make sure you have a steady cash flow. Aim to have more than enough to cover the costs each month, so that if someone delays payment, you will be able to cover the expense yourself. You can help this by minimizing your expenses and saving as much as possible. Doing so will help you survive late payments and not feel the impact that they can have if unprepared.

Use Reinforcement

Reinforcement can help you foster timely payments with your clients. Reinforcement can be either positive or negative, and both have their benefits. With positive reinforcement, you can try to increase the chances that your clients will pay on time by giving them some type of reward. This can be something like a small discount that will be applied when an invoice is paid on time or ahead of schedule. Discounts for paying upfront for many months of service is an example. Negative reinforcement involves someone doing something because it prevents something negative from happening. If a client receives some type of negative consequence for late payments, such as a late fee, they’ll be more likely to pay on time in order to avoid this consequence. However, you approach it, try to find a reinforcement strategy that will work with you and your clients.

Talk It Over

Another strategy that can minimize late payments is talking to your clients about the issue. Make sure to be professional and courteous, but clearly communicate about late payments if they have become an issue with a client. You can try to be proactive with your communication. Send scheduled reminder emails about an invoice. Make a call and find out if there’s any way you can help them pay on time. Keep track of your communication throughout the process, so that you can show clients all the attempts you made to get their attention about the issue if it becomes more of a problem. Importantly, it’s good to clearly communicate with your clients about your expectations from the beginning of your relationship, so that they know what they are. Get them to agree on your payment terms. Then if payment becomes an issue, it won’t be a surprise to them if late fees become necessary.

Provide Options

It is important to provide a variety of payment options to your clients. Doing so can increase the chances that they will pay on time. Think about accepting credit and debit card payments, ACH payments, checks and eChecks, social payments, and any other type of payment they may prefer. Accommodating your clients’ payment preferences can go a long way. Accepting credit cards for small businesses is more important now than ever. We at Moolah do our best to help our clients with their payment processing needs. We know that clients may prefer using credit cards. That’s why accepting credit cards for small businesses is one of our main functions. If you are considering ways to accept credit and debit card payments, we hope you will think of us.