7 ways to get paid on time (without having to beg)

These handy tips will help you spend less time stressing about late invoices, and more time on the fun parts of running your own business. Let’s get you paid, ASAP.

1. Look after your business relationships

You don’t need to send your clients a fruit basket at the end of every month, but a little thought goes a long way when it’s invoice paying time. Remember names, thank your client for their business and make sure you submit your invoices exactly how they’ve asked for them. It’ll all help you get paid on time, and (hopefully) get hired again in the future.

2. Consider billing up front

For some jobs it's totally acceptable to bill your client before you begin work. Especially if you’re working on a long contract, or if the job requires an upfront spend on your part – for materials or labour, say. How much you charge before starting a job depends on your relationship with your client, and how you’ve set up your rates. You might want to ask for a percentage upfront, or if you’re billing for time then invoice for a week or two in advance. Getting part of your payment upfront is a smart way to regulate your cash flow, so you’re not caught short when your bills are due.

3. Diversify your payment methods

Making it as easy as possible for your clients to pay you is just good business sense. If you’re only getting paid by cheque in this day and age, you’re probably going to experience some payment delays. Especially if your client can’t find a pen. Whether you set up a PayPal account, invest in a card reader like an iZettle so you can accept credit card payments, or even research getting paid via QR codes, having a variety of payment options will only increase the likelihood of you getting paid on time.

Diversifying your payments methods isn’t the only way of saving time and money when it comes to getting your invoices paid. ANNA can help you create, send and chase invoices with just a few clicks – and very little faff. ANNA keeps an eye on what’s been paid into your account, and checks it against your sent invoices. Any client that’s overdue will automatically receive a polite reminder email from ANNA, with wording you can completely customise. Now that’s a load off.

4. Put things in writing

If you need some extra payment security going into a job (perhaps it’s a longer-term contract, or you’re working with a new client) then consider putting your payment requirements into a contract. If you can come to a mutual agreement before you begin work, your payment will be protected by the terms of your contract – and a late payment could mean you’re eligible to charge late fees, if that’s also included in your contract. Just make sure you run any sort of employment contract past a lawyer, solicitor or a legal-savvy friend before you sign.

5. Make a reminder schedule

We can all agree that, as a busy small business owner, chasing up late invoices isn’t the best use of your time. There are a million and one things you could be doing instead of going back and forth between your calendar and your bank balance every time an invoice is overdue. To save some precious headspace, why not make yourself a client reminder schedule? Simply stick your invoice due dates in your phone calendar as soon as you send invoices to your clients – that way, you get an automatic reminder every time an invoice is due. Or invest in some automated invoicing software to send out recurring invoices to regular clients, chase up invoices and save you the bother of remembering at the end of every month. With a system like this in place, you can send out regular late payment reminders to your clients without it taking up too much headspace in the meantime.

6. Chasing up late payments

Yes, it’s the worst. Chasing late payments is one of the trickiest and most uncomfortable parts of being a small business owner. But you’ve done the work, and you’re completely within your rights to be paid on time. If you’re struggling to find the right words for your chasing emails, here’s a few examples that we’ve found work well for ANNA users:

Reminder email template (for the day the invoice is due)

Subject: [Your business’ name]: invoice [invoice reference number]

Body:

Hi [Recipient’s first name],

I hope you’re well.

This is just a reminder that payment of my invoice [reference or invoice number] which I sent on [date of invoice email] is due today. All payment details are specified on the invoice.

Please let me know if you have any questions, or need me to send the invoice again.

Many thanks,

[Sender’s first name]

Polite reminder email template

Subject: [Your business’ name]: invoice [invoice reference number]

Body:

Hi [Recipient’s first name],

I hope you’re well.

I have yet to receive payment of my invoice [reference or invoice number] which was due on [date due].

I would be really grateful if you could let me know when I can expect to receive payment.

Many thanks,

[Sender’s first name]

More urgent reminder email template

Subject: OVERDUE: [Your business’ name]: invoice [invoice reference number]

Body:

Hi [Recipient’s first name],

I still have yet to receive payment of my invoice [reference or invoice number] which was due on [date due].

This invoice is now [number of days overdue] days overdue. Please could you let me know when this payment will be made as a matter of urgency? As per my contract terms, I may have to charge additional late fees once this payment is overdue by X days.

Many thanks,

[Sender’s first name]

Reminder emails aren’t getting answered? Then a phone call to the accounts team can often get the ball rolling. If you feel a bit nervous picking up the phone, then rehearse what you want to say beforehand, and write out some bullet points so you don’t forget anything important. Remember that your client is busy too, and often all it takes is a slightly awkward phone conversation to remind them they’ve neglected part of their business. Try not to assume the worst, and begin with polite, gentle reminders. If you don’t get a response, try a more formal tone – don’t forget you’re well within your legal rights to ask for an immediate payment once your invoice is officially overdue. Most clients will pay up eventually, it just takes the three ‘P’s: patience, politeness and persistence!

7. What to do when they really won’t pay

So you’ve tried everything, but your business is still down the cost of that last job and your client isn’t picking up the phone. What to do?

You could inform your client that you charge interest on late payments. Some people charge an extra 2% on the cost of the entire job after 30 days, others charge a 5% fee for every 30 days that the payment is delayed. It’s up to you to decide on your payment terms, and of course it’s important to confirm them with your client prior to beginning work. The government advises charging ‘statutory interest’ on late commercial payments, which is 8% plus the Bank of England base rate for business to business transactions.

If your client doesn’t respond to your emails, calls or late payment fees then you could consider legal action. The government has plenty of advice about pursuing unpaid invoices in the small claims court, or you could hire a solicitor that specialises in debt recovery. They’ll usually charge an hourly rate or a percentage of the unpaid invoice, and the costs you’ll incur will depend on the size of the debt owed. The good news is that you’re entitled to charge your client a fixed sum for the cost of recovering a late payment, in addition to claiming statutory interest. Again, this sum depends on the size of the debt.

However you choose to chase up unpaid invoices, remember that good client relationships are built on trust. If you’re constantly chasing late payments from a client, it’s worth reassessing whether you work for them again in the future.