Late Payments Cause Small Businesses to Struggle – How to Take Control of Your Income

59% of small businesses are struggling with income due to late payments according to a survey by market research and data analytics firm YouGov. Additionally almost one-third of small businesses say that  receiving payments 20 to 30 days after their due date is putting them at risk for closure.

Experts recommend taking these four steps for dealing with late payments. 

First, optimize your cash flow by collecting a deposit before a job, invoicing in advance, drafting a contract that stipulates terms of payment, doing a credit check of the business or individual paying you, and digitally tracking your invoices. 

Second, be prompt with following up on late payments. Reach out to the customer via email, attach a copy of the invoice, and remind them of their options for payment method. 

Next, if a month has passed with no email response, call the customer. Identify the correct person to speak with about payment and focus on the agreement made.

Lastly, if the customer fails to take steps towards payment, you have three final courses of action. You can refuse to complete further work and restrict access to any shared documents or brand assets. You can also go to a collection agency who will follow up with the customer in exchange for 20% to 35% of the payment collected. If necessary, you can take legal action if the damage is substantial and worth the investment of time and money.

Having your customers pay on time makes the difference to your stream of income and the survival of your business.  Another way  to insure success for your business is  to save money on your taxes.  It’s the quickest way to increase your bottom line. Join our DeTax University program for 16 classes that will guide you through saving taxes in areas like vehicles, short term rentals, retirement plans and so much more. Our goal is to save you over $10,000 in taxes each year. Click here for our special offer.