How do you motivate customers to pay on time?
It goes without saying, but good client relationships go a long way in helping admin run smoothly – including to get invoices paid. That said, it’s also good practice to maintain professional boundaries, which include setting out clear payment terms within your invoice.
To encourage clients to pay on time, you could offer preferential early payment discounts. One common example of this is the ‘2/10 net 30’ method. This formula means that the client will get a 2% discount if they pay the invoice in the first ten days of receiving it. The ‘net 30’ simply refers to the standard 30-day payment term.
You don’t have to use the 2/10 net 30 method, and you may prefer to specify different terms for different clients. You may also want to increase the discount or the early payment window. Fundamentally, it comes down to what works for your business and cash flow.