Here are 5 ways to avoid a cash crunch by doing your part to help clients make their payments on time.
Putting up with a late-paying client every now and then is definitely annoying, but it’s usually not the end of the world. If late payments become a regular occurrence, however, you should take action. Consider how your clients experience your billing process, and think about what will make it easier for them. Otherwise, you risk hurting your cash flow and your firm. Here are 5 ways to avoid a cash crunch by doing your part to help clients make their payments on time.
1. Pre-qualify your clients.
If one of the first questions from a prospective client is, “How much will this cost?” you’re probably in trouble. This may be a sign of price sensitivity that could create more issues than the project is worth. Most quality clients will always pay your invoices on time and won't question your fees too often. When you’re in the position to do so, it’s healthy to decline prospective clients who may not be a good fit for your firm.
2. Read over contracts with your clients.
It’s common practice for people not to thoroughly read contracts before signing them. After all, how many software user agreement policies have you agreed to without reading in full?
When a client signs a contract, make sure you go over all important sections of the contract with them, including the terms of payment. It’s ideal to do this in-person, but you can talk on the phone if a meeting isn’t possible.
Additionally, going through the contract with your client will also help you manage their expectations. You’ll cut down on scope creep because they’re more likely to remember what’s covered by your contract amount—and what’s not.
3. Don’t be late with your invoices.
Mistakes happen. It’s easy for an invoice to get overlooked by you, your office manager or another employee. With a project accounting software solution like BQE Core, though, you can easily make your billing process so much faster and accurate.
With intuitive time and expense tracking, straightforward workflows, and more, every part of your firm’s billing cycle is made simpler. You can even automate your invoices by setting up future invoices, rules for billing, and frequency when you undertake a new project.
4. Eliminate confusing information in your invoices.
At the start of the relationship, have clients specify what information they need on their end to pay an invoice. Do they need a certain office street address on it, rather than one of their others? Do they have an internal PO number that's required? Who should be getting your invoice to get it processed?
Make your invoice information clear as well. Avoid terms that need interpretation, like "net 30." Instead, specify the exact due date so there's no confusion. Make sure the bottom line total and line items are easy to find and understand. It should be easy for the client to understand exactly why they're getting billed the bottom line amount. With Core, specifying and tailoring your invoice information is simple.
5. Make it easier for clients to pay.
If your whole system up through sending invoices is top-notch, consider upgrading your payment process. Don’t make clients write a check and mail it back to you. Your firm should take credit cards and offer at least one online option for making payments.
About BQE Core:
BQE Core sets the standard for billing, time & expenses, project management, and accounting software for professional services.
Made by award-winning BQE Software, it gives professionals the speed, flexibility, and visibility they need to accelerate productivity, boost profits, and spend more time doing what they love. Core boasts comprehensive dashboards, native mobile apps, in-depth reports, a bevy of customizable features, and a revolutionary pricing structure.
To learn more about BQE Core or schedule a walk-through demonstration today, visit www.bqe.com/core.