Getting paid on time is a constant challenge for many small business owners. Late payments aren’t just annoying, they can be potentially business killing. 

Unfortunately, chasing invoices can feel like a full-time job, taking time away from what really matters. If you've ever dealt with:

• Clients who go silent when an invoice is due
• Excuses like "the payment is processing" for weeks on end
• Endless back-and-forth with accounts departments
• The frustration of working hard but struggling to see the money land in your account

You're not alone…

Many small businesses face these challenges daily, but the good news is that with the right strategies, you can encourage prompt payments. 

Here are some practical tactics to help you get paid quicker and easier.

1. Set Clear Payment Terms from the Start

One of the simplest ways to prevent late payments is to set clear payment expectations before you start work. Your payment terms should include:

• Invoice due dates (e.g., payment within 7, 14, or 30 days)
• Accepted payment methods (bank transfer, credit card, direct debit, etc.)
• Late payment policies, including any fees for overdue invoices
• Deposit requirements (if applicable)

Many businesses are shortening their payment terms from the traditional 30 days to 14 days. This is a great first step to ensuring you get paid faster. 

Make sure any terms are outlined in contracts, proposals, and invoices so clients are fully aware before committing to your services.

2. Invoice Promptly and Correctly

A late invoice often results in a late payment. As soon as you complete the work or reach a billing milestone, send your invoice promptly. 

Ensure that your invoices are:

• Clearly formatted, with an easy-to-read breakdown of services or products provided
• Accurate, with no missing details or errors that could cause delays
• Addressed to the right person (especially important for larger businesses with finance departments)

Using invoicing software like Xero or QuickBooks will streamline this process and reduce the likelihood of human error.

3. Offer Multiple Payment Options

Making it easy for clients to pay you is a game-changer. If you only accept bank transfers, some clients may delay payment because they prefer using credit cards or digital wallets. 

Consider offering:

• Direct debit payments
• Online payment gateways like Stripe or PayPal
• Credit and debit card payments
• Automated payment links in your invoices

The fewer barriers there are, the quicker you'll get paid.

4. Implement a Payment Schedule

For larger projects, consider breaking payments into milestones instead of invoicing a lump sum at the end. 

A typical structure might be:

• 50% deposit before starting work
• 25% at the halfway point
• 25% upon completion

This approach ensures a steady cash flow and reduces the risk of late payments at the project's end.

5. Use Automated Reminders

Many clients don’t delay payment intentionally, they simply forget. Automated reminders can gently nudge them without requiring manual follow-ups. 

Most accounting software allows you to set up:

• Reminder emails before the due date
• Gentle follow-ups after the due date
• Escalating reminders with firmer language if payments remain outstanding

This approach keeps you on top of overdue invoices while maintaining professionalism.

6. Consider Incentives and Late Fees

Encouraging early payment can be as simple as offering small discounts for clients who pay before the due date (e.g., 2% off for payments within 7 days). Conversely, implementing late fees can deter delays. If using late fees, make sure:

• They are clearly stated in your payment terms
• They comply with UK regulations, such as the Late Payment of Commercial Debts (Interest) Act

Most businesses will prioritise payments to avoid the extra charges.

7. Build Strong Client Relationships

Clients are more likely to pay on time if they value your relationship. Good communication, professionalism, and rapport can make a big difference. 

If a client regularly pays late, have an open conversation to understand the reason and find a solution.

8. Use Direct Debit for Recurring Payments

If you have clients on retainers or subscription-based services, setting up direct debit payments can eliminate the hassle of chasing invoices. 

Services like GoCardless allow you to collect payments automatically, ensuring consistency in your cash flow.

9. Know When to Escalate

If a client continues to ignore payment reminders, you may need to take stronger action. Consider:

• A final warning email outlining potential legal steps
• Using a debt collection agency (as a last resort)
• Pursuing legal action through the Small Claims Court if necessary

While legal action should be a last resort, having a clear process in place can prevent persistent late payments.

10. Review and Improve Your Payment Processes Regularly

Cash flow management is an ongoing process. Review your payment strategies regularly and identify areas for improvement. 

If you notice consistent issues with certain clients or industries, consider adjusting your approach.

Final Thoughts

Getting paid on time is essential for your business’s financial health. By implementing clear payment terms, automating invoicing and reminders, offering multiple payment methods, and building strong client relationships, you can significantly reduce the stress of chasing payments.

At Curve Accountancy, we help small businesses optimise their financial processes, improve cash flow, and stay on top of their accounts. 

If you need tailored advice on managing your business finances, get in touch with our team today!