How to Get 80 Percent of Your Invoices Paid Instantly

How to Get 80 Percent of Your Invoices Paid Instantly

You’ve probably had to ask yourself: Why don’t my clients pay on time?

Payment delays are often a matter of life and death for a small business. 

According to a U.S. Bank study, 82 percent of business failures are due to cash flow issues.

After working with over a thousand businesses, we have implemented strategies to ensure more than 80% of our customers invoices are paid instantly.

We are sharing these actionable tips for small business invoicing.

See Also: Free Invoice Templates You Can Use Right Now

Why don’t clients pay invoices on time?

For all sorts of reasons. Some are busy, some have bad support systems, some genuinely don’t have the money.

The good news is: mostly, the problem is with the invoice. 

Most people have the money, but lack patience dealing with payments.

How to get clients to pay invoices instantly

The Bridger team have loads of experiences figuring out what to do to encourage clients to pay on time. These tips are proven to work, and this is how Bridger has help it's customers attained a 80 percent instant payment rate for their clients.

Unless your invoice recipients have serious cash flow problems themselves, these tips will help you get paid faster every time.

See Also: When Does Invoice Financing Make Sense?

1. Send the invoice right away

Make sure you invoice your clients while the memory of your great service is still fresh.

If possible, send the invoice together with the last deliverable. Additionally, sending your invoice early ensures that you get the money sooner, even if your client pays late.

2. Make payment terms shorter

If you need your money in four weeks, make payment terms in two weeks. If you need it in two weeks, make the terms one week.

Unless you are working with a big organization with monthly billing cycles, this will still seem reasonable and provide an extra time buffer in case they pay late.

3. Conduct credit assessments on your buyers.

One of the major reasons you might not get paid, is if your buyers has cashflow problems...By checking the credit score, full credit information and payment trends of your buyers.

It's important to sell to customers that have good credit history along with no delinquencies or unpaid debts. Having access to these insights gives you the data you need to avoid selling to risky customers, or allow you ensure instant payment when selling to them; even if at a discount.

4. Make sure you bill bigger clients on their cycle

When starting your partnership, ask your client about their billing cycle. If their accounting department pays bills once a month on the 15th, make sure you invoice them monthly around the 10th.

See Also: Using Invoice Factoring to Safeguard Your Cash Flow

5. Make your invoice short and clear

An average person receives 116 business emails daily. As soon as your recipient thinks, “This is too hard—I’ll do it later,” you’ve lost them.

Eighty percent of inboxes have between 72 and 21,000 items. If your invoice is not simple enough to process in one to two minutes, their “later” is likely to become “never.”

6. Make it easy to pay on mobile

So, you want your client to pay the invoice right when they open it. More than half of emails are first opened on a mobile device. This means a good invoice will not make them copy-paste information from PDFs, fill out long forms, or deal with special file formats. Ideally, it will be a short link or button saying “Pay here,” like Bridger "Payment links".

Another feature that has proven to work well on mobile are SMS invoices. Research seems to suggest that, on average, SMS is more engaging than email. For invoices, SMS is great as there is typically less clutter in recipients’ SMS than email, also there is a stronger tendency to deal with SMS right away.

7. Make sure it is easy to forward

How many invoices were not paid because a busy boss opened the email on their iPhone and forwarded it to accounting without attachment, while deleting their version?

First, your invoice should have been sent to accounting in the first place. Second, it should still be easy to forward.

This means that in addition to the attachment, you should have a link leading to the invoice in your email text. Even if the recipient does not forward the attachment, the link still stays.

8. Charge automatically whenever possible

It is hard to forget a payment that is deducted automatically. Do everything possible to encourage clients that consistently buy the same service to opt for an automatic subscription.

Be sure to incentivize this wherever possible, to encourage clients to opt in. This could mean offering discounts or other relevant perks to your automatic billing subscribers.

9. Send consistent, friendly reminders

Always assume the best about your client, unless proven otherwise.

If they haven’t paid your invoice, assume they simply forgot. Send them a friendly regular reminder, with no more than one to two sentences, until they have paid.

10. Make it easy to ask a question

“I don’t understand this invoice! What is it for?”

Your client may have forgotten about your invoice—and there is no way for your client to find out more if your invoice was sent from a no reply email address. They will just ignore or delete it as spam and proceed with their business.

So, to make it easier for them, be clear about how to contact you if they have questions.

See Also: The Definitive Guide to Invoice Financing: Unlocking Cash Flow and Accelerating Business Growth

With these strategies in place, your clients will be able to pay you faster—which will make the job of running your business easier. 

While Bridger helps you automate these tips and more, they are compatible with any system, from custom programming to DIY Word-and-Excel billing.

Together with a solid understanding of cash flow, you’ll be able to avoid common pitfalls and be ahead of the crowd.

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