6 ways to get clients to pay on time

Revenue is only one piece of your cash flow, but it’s important to stay on top of—or maybe even ahead of—your received payments. Late payments can skew your financial projections and put a dent in your available funds, disrupting business operations. In this article, you’ll find six practical strategies to ensure you receive timely payments and maintain a healthy cash flow.

1. Set all your payment terms upfront

To establish terms, conditions, and expectations at the start of your relationship, settle payment terms in writing during the onboarding process. Be sure to establish specific due dates, payment intervals, and (if applicable) deposits. Legitimate clients expect to have these conversations, and setting clear parameters early on will help build a long-term relationship and give you leverage in case of late payments or outstanding invoices.

2. Send invoices promptly, and include the due date

The sooner you send your invoice, the more likely you are to receive on-time payments. Including a reasonable due date prominently on your invoice will also prompt your client to schedule their payment. This can also help clients manage their own cash flow.

Late or erratic invoices (and payments) often result from manual processes. To minimize human error and save time, automate your invoicing with billing and accounting software that’s connected to your business checking account—especially for recurring payments.

Did you know?

You can send free, professional invoices from your Bluevine dashboard in minutes.

3. Make it easy for clients to pay you

Sending an invoice without clear payment instructions is an unnecessary barrier for your client that makes them less likely to send a timely payment. Providing a smooth payment process will increase your odds of timely payments.

Use a digital invoicing platform to save time and enjoy some or all of the following benefits:

• Clickable links or QR codes for receiving payments on your invoices
• Automated tracking so you can see when an invoice has been opened or paid
• Scheduled reminders that remind clients of upcoming due dates

4. Let clients pay you how they want

While you may have a preferred payment method, offering multiple payment options makes it easy for clients to pay you on time. Common options include ACH direct debit, wire transfer, credit card, debit card, and check. Consider setting your preferred method as the default option to encourage your clients to pay you that way.

Most business banking platforms will charge their own payment processing fees, but you can also use fees—i.e., a credit card processing fee—to push clients toward your preferred method while still offering flexibility.

5. Make it clear that you appreciate the client’s timely payments

When a client pays you on time, sending a brief ‘thank you’ message on receipts or confirmation emails helps reinforce that behavior. These brief acknowledgements can strengthen your business relationship and build long-term reciprocal trust.

6. If your client isn’t paying on time, start requesting an upfront deposit

When a payment is overdue, you can charge late payment fees and send urgent notices to encourage payment. However, these are reactive strategies that only work after your client has missed their due date. After a client has missed a payment, you can get ahead of future late payments with a proactive approach: requesting an upfront deposit. This can help cover your cash flow needs, and gives clients an additional stake in paying you on time.

How to prepare your business for late payments

You’ll probably receive a late payment (or several) eventually, regardless of what you do to prevent them. Here’s how to prepare:

• Accept unpredictability: Payment schedules can be erratic, especially when dealing with small businesses or navigating seasonal fluctuations.
• Create cash flow buffers: Diversify your income streams, offer early payment incentives, and maintain an emergency fund to cover unexpected cash flow problems.
• Plan how you’ll secure late payments: Establish your late payment collection timeline when setting payment terms. Include escalation procedures and clearly defined consequences.

What to do if you haven’t received payment

Here are some suggestions for handling missing payments from clients:

• Double-check your payment communications: Using your invoicing platform, confirm that your invoice was sent, received, and opened.
• Contact the client’s accountant or finance department: Non-payments can result from internal issues at your client’s accounting department. Contact them before escalating the problem to the owner’s attention.
• Seek legal advice: If all else fails, contact a collections attorney. This could be costly, so consider it an option for substantial debts. Smaller non-payments may be written off as business losses while you sever your relationship with that client.