I was hanging out with a friend who runs their own business when they mentioned how it was taking five days for a client payment to hit their bank account. They were frustrated because they would accept payments immediately but it would take forever for them to actually see the money.
This is just one example about how having the wrong payment systems can lead to cash flow and budgeting problems. The truth is there are probably several ways you can improve the way you accept payments in 2018.
Accept payments online.
In this day and age, I still have to convince business owners to start accepting payments online. While they are understandably worried about fees and security, the truth is there are products out there that are better than ever.
Besides, you need to make it as easy as possible for people to pay you. Otherwise, you’re never going to see any money. On top of that, fees are tax deductible. That being said that doesn’t mean you should be careless about wasting money on fees. This brings me to my next point:
Check the fees.
Another way to improve the way you accept payments in 2018 is to check for fees. You’ll want to make sure you aren’t wasting money on processing fees, especially if there are better deals out there.
If you like your current payment processor, you may want to try negotiating with them. Based on the volume of payments you receive, you may be able to strike a deal. If not, then start shopping around.
Automate your payments.
If you haven’t yet found a way to automate client payments, you’re leaving money on the table. Period. I started using automatic payments with coaching clients this year and it’s single-handedly improved my monthly cash flow.
There are two main ways to incorporate auto payments into your business. The first is to use a system that automatically sends out invoices and follow-ups so you don’t waste time doing it yourself. This is great for contract work like freelancing.
The other option is for retainer projects. If you have clients on retainer, meaning they pay you a specific amount each month, then you can put them on auto pay. This means they sign up to have money withdrawn from their accounts or charged to their credit cards automatically.
This alone will reduce the number of lay payments you receive because it’s all on autopilot. In fact, this is the ONLY way I accept payments for my group coaching program and consulting.
Work on getting money upfront.
Contrary to popular belief, you can get money upfront for projects. It’s called a deposit and it’s very common. This ensures that a) a client has secured time on your calendar and b) if they bail on you later at least you got some money.
Many small business owners will not start working unless they see a deposit. I do not do consulting without getting at least a deposit. For small business clients which require writing, I ask for a deposit. The only exception is if there is some third party like a marketing agency which automatically takes care of payments.
If you want to improve your cash flow in 2018, look no further than improving the way you accept payments. With a few tweaks, you can ensure you’re getting the money you’ve worked hard to earn.