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5 Tactful Ways To Collect Overdue Payments

Jan 23, 2023 8:00:00 AM / by Billie Selichnow

Maintaining a good relationship with your customers is crucial for long-term business success. However, when it’s time to collect payments, things can get challenging. Unfortunately, paying you is not top of mind for your customers. So, what can you do to reduce overdue payments and make it easy for customers to pay you on time? Here are 5 ways to collect overdue payments and protect your business from harmful losses.

 


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Tip 1: Prevent Invoicing Delays

One of the easiest ways to ensure your customers pay on time is to put work into making your invoices flawless. Research shows that 61% of all late payments are connected to invoice inaccuracies (FIS Global). So, how can you ensure that your invoices are always correct and keep your payments coming in on time?

  1. Focus on spelling: Simple typos can result in major discrepancies in the payment amount of details such as the due dates, or quantity numbers. These simple mistakes can harm your reputation and damage customer relationships.
  2. Use invoice templates: Retyping repetitive invoice details can cause simple mistakes and take up your valuable time. Information like payment information, tax, due dates, and terms and conditions will always stay the same, so adding them to a template will save you a lot of hassle and even decrease the amount of small but damaging errors.

You can prevent invoice errors by automating your processes and using software that lets you use invoice templates, reminder emails, and send late payment reminders. With invoicing software, the information you have for each customer and their completed jobs is automatically added to the invoice. Using this automated method saves you time, reduces the chance of manual errors, and increases the chances of you getting paid on time.

  1. Recap - Reducing Invoice Errors:
    1. Always check spelling
    2. Use invoice templates
    3. Limit manual work
    4. Use invoicing software

With Lawn Buddy's Lite plan, you can automatically send pre-designed professional invoices that include your company logo and job details as soon as a job is complete. This plan is free forever, so create your account and try your new features risk-free.

  Create My Free Account  

 


Tip 2: Cut Payment Due Dates in Half

If there has been an emerging trend of your customers paying late - it’s time to change your due date. On average, businesses stick to the 30-day payment rule. This means customers have 30 days from the day the invoice was sent to pay for services. However, a longer due date lowers your chances of getting paid quickly, as urgency is reduced and the priority level to pay the invoice drops. In fact, research shows that the more time customers have to pay, the later they will pay their invoices.

Statistics show that invoices with a 7-day due date get settled within two weeks! That’s far faster than the 30-day counterpart that takes on average 1 whole month to get paid. Just note, the less time you give your customers to pay - the faster they’ll pay you.

  1. Recap: Cut Due-Date in Half
    1. 30-Day payments rules are outdated
    2. 7-Day payments are the sweet spot
    3. Less time = faster payment

 


Tip 3: Send Invoices Out Immediately

You can increase your chances of getting paid by sending an invoice as soon as you complete your services. Doing this increases your chances of getting paid faster because the due date is usually applied from the moment the customer receives the invoice. If your invoice isn’t sent automatically, the timeframe for your due date would be difficult for customers to achieve if they don’t receive the invoice in the first place.

Although we’ve placed this tip as 3rd on the list, this is the most vital part of the invoicing process. This is because the quality of your work and the completed job is still top of mind for your customers. An invoice sent out immediately gives you a perception of professionalism, keeps customer relationships strong, and puts your customers in the best position to pay in a timely manner. 

  1. Recap: Automatic Invoicing
    1. Send invoices in a timely manner
    2. Send at agreed-upon times

Using invoicing software can give you even more chances to build relationships with customers, by sending invoices at the agreed-upon times, be it with pre-pay options, bi-weekly, monthly, recurring, or on a job-to-job basis. With Lawn Buddy’s automatic invoicing, you have a chance to build these relationships and offer various invoicing solutions to meet you and your customers’ needs.

 

With Lawn Buddy's Lite plan, you can send professional invoices automatically when a job is complete. This plan is free forever, and you don't have to worry about signing contracts or hidden fees.

  Create My Free Account  

 


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Tip 4: Make It Easy For Your Customers To Pay

It’s simple: the easier you make it for your customers to pay, the faster they’ll pay you. Using software that can send an email with payment options and a downloadable invoice ensures that your customers get an invoice the second you send it. Using digital payment options not only saves you money, but also gives your customers a way to pay that they are familiar with - meaning you are providing your customer with the best possible experience. In fact, 54% of customers spend more money with a business if they can pay digitally (Digital Transactions). 

  1. Recap: Make Payments Easy
    1. Send invoices digitally
    2. Offer multiple payment options
      1. ACH Payments
      2. Card-on-File
      3. CC Payments

 

GET ONE YEAR FREE

Lawn Buddy and their payment processor, EVO, are offering you one year of on of our highest subscriptions, saving you up to $720! This partnership allows your customers to pay in various ways, from ACH Payments, Card on File, and Digital Payments - you now have the opportunity to try out Lawn Buddy's best features risk-free.

Request My Free Subscription

 


Tip 5: Reward On-Time Payments

Try offering an early payers incentive. Opt for positive reinforcement, and avoid excessive late fees. Although late fees get the job done, in many cases they can cost you your customers in the long run. For instance, let’s say you have a regular customer who usually pays on time, but this month, they got into financial trouble and can’t pay their invoice on time. 

If they are charged a 5% late fee each week they are late, they’ll have to pay far more than they normally would and  you might lose them due to this bad experience. So, offering rewards to individuals who pay on time can be a better long-term strategy. Although it might seem expensive, even a minor reward can be motivating enough to get customers to pay on time and ensure a consistent cash flow. 

  1. Some rewards you could offer are:
    1. Early-bird discounts for payments made early
    2. Promo codes/discounts for future services
    3. Simple add-on services to regular jobs

Simple and affordable rewards like these let customers know you appreciate them, respect the deadlines, and build valuable relationships that can help you keep customers when competition is fierce. You can even do a large drawing at the end of the year, where each customer with on-time payment history gets entered into a drawing for a reward!

  1. Recap: Reward Good Customers
    1. Avoid excessive late fees
    2. Value relationships
    3. Reward on-time payments

 


As someone who runs a company, your main goal is to deliver impeccable services and get paid fast, so your business can keep earning and growing. Don’t wait to make changes that can impact your business’ earnings. Use the tactics above to ensure you are doing everything you can to make it easy for your customers to pay you fast, and reduce overdue or lost payments.

 

Make these changes at no cost to you, when you sign up for our free Pro account! Lawn Buddy and EVO Payments have partnered up to give you 12 months free of the Lawn Buddy Pro subscription - that's a savings of $360! With Lawn Buddy, you can manage customers, jobs, equipment, crews, invoicing, and more; while EVO makes it possible to process ACH payments and have card on file.

 

GET PREMIUM FEATURES FREE

Lawn Buddy and their payment processor, EVO, are offering you one year of on of our highest subscriptions, saving you up to $720! This partnership allows your customers to pay in various ways, from ACH Payments, Card on File, and Digital Payments - you now have the opportunity to try out Lawn Buddy's best features risk-free.

Request My Free Subscription




 

Tags: Green Industry, Lawn Care Apps, Green Industry Apps, Lawn Care Customers, Automatic Invoicing, Payment Processor

Billie Selichnow

Written by Billie Selichnow

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