3 Signs Your Client Won’t Pay Your Invoice On Time
Invoicing for small business owners is bittersweet. While it does represent pay day, it’s not always a walk in the park to track down those payments.
In fact, it’s estimated that about 16% of all work small business owners do is unpaid. As a small business owner you need invoice payments to be timely or else you may run into some serious cash flow problems.
The biggest issue here is that it’s often not your fault. It’s the client. So how are you supposed to know whether or not a client will pay on time? Well, you’ve come to the right article. Here are three tell tale signs your invoice won’t get paid on time.
Your Client Has Trouble Making Decisions
An indecisive client can be a real pain. Not only is it difficult to scope out a project for them, it can also lead to problems when it’s time to collect payment.
When you put together a project scope you should always pay close attention to the client’s decisiveness. You want the client to be confident in both their own and your decisions. If they continue to change their mind or are at all doubtful of your choices, then there’s a good chance they’ll be unhappy with the final product as well. If that’s the case, what makes you think they’re be chomping at the pit to pay your invoice?
That all said, you should always build out a detailed scope with a prospective client before engaging with them. This will give you enough time to gauge their ability to make and stick to decisions.
The Client Only Wants to Pay With a Check
The more payment options you offer to clients the quicker you’ll get paid. If you’re aware of all your options, then you should know that payment via check is the slowest. Sending paper invoices and receiving checks in the mail is outdated. What happens if your client’s check bounces once you receive it? That means waiting another week or more to get the new check (if they even respond to your follow up).
These platforms give you the option to accept payment with credit cards or eCheck’s directly on a digital invoice. This way everything is kept secure and online. If there are any issues when trying to complete the payment you’ll know right away.
You Didn’t Sign a Contract
One of the very first steps you should take when engaging with potential clients is sign a contract. On that contract you need to be crystal clear about invoice and payment terms as well as any late penalties or policies.
If your terms are standard and agreeable your client should have no problem signing the contract. If the client refuses for whatever reason, it’s a huge red flag. In nearly every situation I would never engage with a client if they didn’t sign a contract. Even if it’s your family member, a contract keeps both parties aligned and will help avoid any confusion down the road.
In a perfect world, all payments would be complete on time without a hassle. Unfortunately that is far from the case. In order to reduce headache and keep cash flow flowing, I recommend avoiding deadbeat clients. That said, if a prospective client is showing any of the three signs above, you may wan’t to think twice before working with them.