Harvard Business Review recommend a book called Just Start: Take Action; Embrace Uncertainty and Create the Future written by Leonard Schlesinger, Charles Kiefer and Paul B Brown. The book gives great advice on payments and how you can strengthen your enterprise by implementing some easy measures. They suggest:
Bill as Early as Possible
Don’t wait until the project is done, to send out an invoice for the full amount. Consider stage payments; 25% is due when a quarter of the work is done; 50% at the half way point, etc.
For Example,“If you pay within 10 days, we will knock 5% off the bill.”
Take Advantage of Terms your Customers Offer
If they offer to pay you on the 31st day by wire transfer, in exchange for paying 2% less, say yes.
Don’t Waste Time Trying to get Huge Companies to Change their Payment Terms
If TheWorldsBiggest Co. policy is to pay Ford in 45 days, they are not going to make an exception for you
Stay on Top of Things
If someone is expected to pay within 15 days, make a call on day 15, if you haven’t received the money by then. Use your diary to keep chasing what is owed to you.
Have your Customers Pay in Advance
This doesn’t scare off potential paying clients as they will just say no. Think about it… Do Deloitte, etc. care that they’re too expensive for many small businesses? The answer’s likely a “no” because those aren’t the clients that they’re looking for. Know your target market and play to their rules.
Make Accounts Receivable Personal
Open up about yourself to them, for instance; be quick to mention to clients that you have four kids to put through school and the various bursars you are supporting. Have no sense of humor when you tell them your conversation with the people you owe: “My client promises to pay me any day and that’s when I will pay you.” Since most people can relate to the challenge of paying tuition bills, your invoices should be moved to the top of the pile.