News

Stay up to date with all things Xero, accounting & bookkeeping advice, and business guides and tips.

GoodsSellingBusiness useOfficeRecordsHome OfficeImportanceTeachingSavingMoneyKidsPayment termsBalance sheetDebtCredit controlFreelancingControlCost managementBudgetPlanOutflowInflowCash flow forecastForecastCash flowInvoicing sytemsDebtor softwarePayment servicesPrompt paymentDebtorsIntegrationTrackingQuotingAccurateProcessesJob CostingGrow your businessReturn on investmentAccountantProfit vs CashFinancingMarginsInvoicingSalesProfitEmployment AgreementsACCDomestic violence leaveMinimum wage increaseERA Act 2018ACC LeviesSkillsIndependentEmployeeContractor vs EmployeeHiringContractorsServicesProductsNeedsCustomersTarget marketMarket researchEligibleExpenditureTax incentiveDevelopmentResearchR&DRecord keepingIncomeCashDeductionsTaxGetting startedContractingGoal-settingFinancesLifestylePerformanceVisionGoalsGrowthLiquidity ratiosLiabilitiesAssetsQuick ratiosProfitability ratiosSolvency ratiosRatiosBusiness healthMyIRPay runInland RevenuePAYEEmployeesPayday filingXero payday filingTax invoiceGetting paidContractorFocusConfidentClientsB2BBusiness to businessAcknowledgementAccountabilityActionAcceptanceAwarenessChangePayrollSoftwareSimplifyStreamlining processesCreativeAccounting tipsBusiness taxesLimited companyFinancialLegalBusiness complianceRegulatory requirementsFoundationsComplianceXero integratedPayment methodsCultureTeamSystemsFlexibilityCommunicationTechnologyRemote WorkEntrepreneurialSuccessValueMentorSmall businessInvestmentSuperannuationRetirementContributionsSelf employedSuperSafe onlineHackersCyber-crimeSecureAnti-virusSecurityInternetCloud platformBookkeepingAccounting systemFinanceCloud accountingCloudBusinessAccounting Income MethodProvisional taxAIMDataTasksSpreadsheetsAccountingAccounting SoftwareXero SoftwareExcelReviewSuppliersPaymentsInvoiceOverheadsExpensesPlanningWork-life balanceClaimCharitable organisationsTax returnTax deductionTax creditCharityDonationsBusiness.govt.nzLaw round upLandlordsEmployersBusiness ownersLaw changesCard paymentsOnline paymentsDirect debit paymentsOnline payment servicesAged debtCashflowXero payment servicesAccounting tools menuBusiness menuAccountants and bookkeepersNavigation MenuXero updateHolidaysClosure datesChristmas breakChristmasMy Two Cents AccountingXero AdvisorMy Two CentsXero NavigationXero
TAGS

6 secrets to getting prompt payment

If you’re struggling with late payments, and about half of small businesses are, here are some simple tips to try.

Invoice without delay

Your customer can’t pay until you've invoiced them, so make sure you send your bill promptly. Customers are also more open to paying when they've just received the goods or services that you delivered. Cash in on the goodwill by invoicing as soon as possible, there's no reason to delay.

Include all the information

Make sure your invoice has all the right information, including a description of the work or product, the date it was delivered, and any customer requirements such as a purchase order number. Some customers have very specific requirements so ask what they need to see on the invoice. Make the due date and payment terms are clear too.

Ask for prompt payment

Customers used to get weeks to pay invoices, but that's changing. More than a third of businesses now request payment within a week. Consider doing the same. Starting off at seven days will help set an expectation of prompt payment. Most goods and service providers have already provided their part of the transaction so expecting payment on delivery is fair. 

Make paying on time worthwhile

Many businesses charge fees for late payment. If you'd like to try that policy, make sure it's clear on your invoice. Include a line saying something like: “Late fees are assessed after the due date, at the rate of 1.5 percent per month.”

A more positive approach is to offer a discount for prompt payment. The lure of saving money is a powerful motivator, even if it’s just a few percent discount. You can present it like this on your invoice:

Total due: $4,022

Save 5% if paid by 7 December: $3,821

Be easy to pay

Customers will pay faster if they can use their preferred method to hand over the money. Consider whether you can offer them a variety of options, like a credit card or PayPal. There are so many online payment services you can add-on to your accounts software, so there really is no excuse to not be able to add various payment options. 

Chase payments

Your job's not done when the invoice goes out the door. You'll need to follow up with the customer to make sure it’s being processed. If the invoice goes past due, it's time to make a phone call. If this is not your thing, we all hate asking for money even if we have earned it, then try out debtor software that does the hard work for you.


Talk to us about your invoicing systems, payments services, and debtor options. We can help you get paid faster.