HOW DO YOU ENSURE THAT YOU GET PAID IN A TIMELY MANNER?
Entrepreneurs share how they keep on top of accounts receivable
“Milestone payments work for me: 50 per cent up front, 25 per cent at first milestone, 20 per cent at second and five per cent at close. Agreeing on milestones with the customer and confirming them as the project moves forwavrd goes a long way to confirming client satisfaction, adjustments and end results.” Patricia Lambert, owner and producer of Red Shoe Savvy, redshoesavvy.com
“For me, it’s pretty simple. I give my clients 30 days to pay and if they do not pay within the 30 days, I halt all services until I receive payment.” Ameet Khabra, search engine marketer at Ameet Khabra Marketing, ameetkhabra.marketing
“I encourage small businesses to take payment up front or at least a deposit to ensure payment is made in a timely manner. Accepting credit card payments is a huge asset for a small business owner. Most clients understand this.” Ryan Holtz, CEO of Ryan Holtz Marketing Consulting & Training, ryanholtz.ca
“Getting prompt payment from a client first starts with a clear understanding of your customer’s expectations, married with quantifiable measurable goals. If both parties understand unequivocally what success looks like, you’ll find it a lot easier to get paid. In the end, clients may be experiencing tough economic times or outside influences that affect your prompt payment, so offer flexible payment terms, and remember: customers are people too.”
Ken Jurina, president and CEO of Top Draw Inc., topdraw.com
“In these times of invoicing and collecting we have a tried, tested and true payment method. We have a contract in which all parties agree on before the run, I then take a deposit. But one to three weeks before the service I collect the balance. This way I can move onto other clients knowing whatever is being done has been paid for. Most businesses we deal with will collect before releasing their product.”
Suzan Burtic, president of Legends Limousine, legendslimousine.ca
“We always prepare a letter of agreement and ask for a 50 per cent deposit to reserve a date or project and have the client sign the letter. The letter also outlines when the balance is due along with other logistical details so that we know our respective responsibilities. In the 19 years that we have been in business very seldom have we had any issue with payment.”
Joanne Blake, founder of Style for Success Inc., styleforsuccess.com
“Terms of payment shouldn’t be a surprise to your customer. Ensure these facts are stated on your quotation, website and invoice. Ask for a deposit up front and final payment upon completion of the project or product. Don’t forget to include a fee for late payments (interest charged on the balance owing). You have provided a product or service and have a right to be paid in a timely matter.”
Gail Hall, chef and owner of Seasoned Solutions, seasonedsolutions.ca
“Communication and expectation setting is really important. We help our customers understand the importance the on time payment means to us and how it ensures a higher quality of service and reliability for them. This way, they are vested in our mutual success and it also helps to provide early payment discounts, as well as invoice due reminders (before the invoice is due). As well, make it easy for them to pay by offering multiple methods.”
Ashif Mawji, president of Trust Science, trustscience.comtions.ca
“Customers are subject to a credit check before we take them on and pending their score we’ll often require a security deposit. We further incentivize security deposits by offering lower rates and pay interest. If a customer doesn’t pay, we draw on the deposit and then refund the balance.”
Chad Mielke, owner of Peace Power Corporation, peacepower.ca
“Negotiate multiple payments for each job. Ask for the first payment up front. Don’t delay on sending your invoice, send it the minute you are approved to do so. Clearly state the deadline for payment on the invoice. Send the invoice electronically and accept electronic payments if possible. Follow up immediately if payment is late.”
Blaine Bertsch, founder of Dryrun, dryrun.com