Accelerating Client Payments

Accelerating Client Payments ?? Optimise your process in your payment sequence??

Getting paid speedily by clients is a game-changer as you look to expand your business, and especially as your outgoings scale with team growth.

?? What's the incentive for your client to pay early, or on time?

?? What's the disincentive for them to pay late?

Think about:

1) Contract Terms

? Invoicing on offer acceptance date, not start date (some clients/markets will be open to this, others need some persuading, but it makes a HUGE difference to cash flow).

? If you can't agree on full payment on offer acceptance, you might be able to agree 25% on acceptance and 75% on start, or similar.

? Incentives for on-time or early placements: 10% off next hire? Extension of rebate/guaranteed period etc.? (you will need to calibrate these according to your client base, fee size, business needs).

? Default free placement: Instead of rebate locks in the fee.

? Free replacement (or refund) on contingent on timely payment: Ensure your contract specifies that any guarantee (replacement/refund) is only provided if the client has paid their fee on time.

? Default 7-day payment terms: Some clients won't be impacted at all by paying in 7 days versus 30. You may get push-back and need to flex. But if you don't, your fee comes in 4x faster!

? Fees/charges for late payments: Terms should include penalities/interest for late payment.

2) Invoice & Invoice Email Content

? As well as your terms of business, the content on your invoice and the emails accompanying them to clients are important 'real estate' for you to re-highlight the payment terms.

? Set up custom emails / tools for client payment chasing: Reminding clients of what they get if they pay (a) early/on time (b) what they lose if they pay late (c) the charges they incur if they pay late.

3) Overdue Payment Collection

? You should have a robust process in place for collecting overdue payments.

? Automatic reminders (tech).

? Phone your client

? If they continue to avoid payment, then email the client confirming a letter before action will be issued if this is not paid in 7 days.

? If still outstanding, engage a legal specialist to issue a letter before action.

What's your process and advice, and what has been your experience dealing with client payments when being a part of a startup?

#Recruitment #ClientPayments #Invoicing #Startups