6 Reasons Why Clients Don’t Pay Their Invoices On-Time
As an entrepreneur, maintaining a consistent level of cash flow in your business is one of the major keys of running a successful business. However, unpaid invoices can be such a drag to the daily running of your business and getting clients to pay up on time is not always easy. There are certain reasons why your clients refuse to pay their invoices immediately they get them and in this post we will highlight six of the most common ones.
Generally, unpaid invoices mainly generate from one or more of the reasons discussed below;
Liberal credit policies
In the bid to attract more sales, a lot of business find themselves extending credit to just any customer. This can cause a major drain on your business as some customers take undue advantage of these policies. Credit options should be given to clients who deserve it and whose credit history you are aware of; this way, you are sure they will pay on time.
They genuinely forgot
Some clients are so disorganized that they just forget to make their payments on time. An easy way to deal with forgetful clients is to send them emails every other week or manual mails and be sure that the invoice is at the top of every document you send to be sure that they see it.
Your payment options are not flexible
Sometimes clients are too lazy to go to the bank or mail you a check. If this is the case, then you should talk to your company’s financial advisor and devise payment options that are flexible enough to let clients pay for your services with just a click of few buttons. This way, the client doesn’t have to do much work and you get paid on time.
Most clients will hold off on paying you if they have a pending dispute with your company. The easiest way to deal with this is to resolve the issue as quickly as possible and devise a strategy to ensure it doesn’t reoccur in future.
Clients don’t feel connected to you
Effective customer management goes beyond delivering goods and services on time. It is also hinged on how well you relate with them and solve their issues when they arise. A customer who has a great relationship with your company will not hesitate to pay his invoice on time.
No, it’s not always your fault! Some clients are just plain dishonest and an easy way to spot these kind of customers is to look out for any red flags during communication. If the debt extends for too long, then it might be time to bring in the experts.
Clients delay payment for a couple of reasons as highlighted above, the key is to understand the exact situation you’re in and devise strategies to get them to pay up and prevent re-occurrences.