It feels great to own and run your own business- the rush when you see your sales numbers increasing, the thrill when you hear people talking about your business; oh yes, it is just amazing. Sadly running a business has its downs as well; one thing that all small business owners hope they don’t see is overdue invoices. Waiting for payments to come in when you are a small business owner or an entrepreneur is tough, especially since you depend on the payments to take you through the month.
All business owners are looking for accounts receivable solutions, because their business depends on it. So what can you do to improve your situation? What if you were to collect payments upfront? What if you were to tell your client that you will start work only when you receive payment? Think about it- no more waiting for clients to pay up.
If you would like to try this, the first thing you need to do when meeting with a client is declare expectations before you start work. Lay the ground work, sell your business or your services and then state your payment terms. Of course, the client will have a number of reasons for why they can’t make an upfront payment-maybe they are worried you won’t fulfil your end of the bargain, maybe they can only pay by check, maybe they need approvals before agreeing. Hear them out, brainstorm and together come up with a payment option that can work for both of you.
It also helps if you quote fixed rates and skip the hourly rates. This provides clients with clarity and they know what they are getting into. You can also suggest discounts (who doesn’t like discounts!) for upfront payments as accounts receivable solutions.
Of course, there are downsides to this option; not every business likes the idea of upfront payments. If you are just starting out and building your reputation, losing a client over this can be bad for business. However if you have a good standing in your field with a loyal client base, you can try this from your next customer. This option for accounts receivable solutions can also help you understand the client based on how he reacts to your condition and even filter out clients you don’t want to work with before entering into a contract with them.
While the accounts receivable solutions of asking for payments upfront may not work for everyone, it could work for you; think about it.