How to Collect Payment from a Customer to Get Paid Faster
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- How to Collect Payment From a Customer
As a service business owner, getting paid in full and on time is one of the best feelings since you know you’ll be able to pay your own bills on time.
This is why it’s so stressful when a client’s due date rolls by without payment.
Late payments occur for a number of reasons, like a client’s forgetfulness or lack of funds. But that doesn’t mean you should be left scrambling to make ends meet. An easy fix is to create a payment collection process that makes it easy and convenient for customers to pay you before an invoice is due.
From sending digital invoices to offering different payment methods, use these strategies to collect complete payments faster.
Get paid faster with these tips for collecting payment:
1. Ask for a deposit
Full payment doesn’t have to wait until a job’s done. You can always ask for a deposit upfront. This is a partial payment that helps you to cover job costs and ensures the client’s seriousness and investment before a project begins.
Although you can ask for a deposit from any client—as long as you follow your state’s guidelines—they’re the most common in the following circumstances:
- When project expenses for a particular job are high or you need to order special materials
- Large jobs with big price tags
- New jobs for first time customers
Deposits are helpful in weeding out noncommittal clients, keeping cash flow steady, and making sure you have the funds you need to cover the costs of a job. They’re usually between 10-50% of a job, but some contractors ask for up to 100% depending on the job.
Remember only to ask for them before a job begins, ideally as part of your quote’s terms and conditions.
Pro Tip: When a customer makes a payment or deposit, send a quick payment confirmation to let them know it was received.
READ MORE: How to write a quote for a job
2. Communicate payment expectations upfront
If you don’t tell your clients your payment expectations, they will have a hard time meeting them. Outline payment specifics upfront, either in person or as part of your estimates or quotes.
Make sure to let the client know:
- How much the job will cost
- Which payment methods you accept
- Whether a deposit is required
- What happens if they pay late
- When they will receive an invoice
- When payment will be due
- If you offer early payment discounts
It’s important to provide this information before a job starts so that you and your client are on the same page from day one, preventing late payments or confusion later on.
3. Send digital invoices
Sometimes, when a client doesn’t pay an invoice, it’s not because they forgot. It’s because they never received it. Paper invoices are easy to lose and run the risk of being sent to the wrong address, making tracking them nearly impossible.
Digital invoices are much easier to keep track of, look more professional, and make it easier for customers to pay you, especially if they include clear payment instructions.
Using invoicing software like Jobber, you can use templates to customize your own branded invoices that include important elements such as:
- Business and client information
- An itemized list of materials and services
- Payment terms, like net 30, accepted payment methods, and any policies for late payment fees
- The total amount due, including taxes, discounts, and deposits
- Guarantees and warranties
- The invoice due date
Not only will this make things easier for your clients, but it’ll also save you time and give you a paper trail to follow if you need one to refer back to.
Pro Tip: With Jobber Copilot, you can access more invoicing insights. Ask the AI tool about your outstanding invoices or the average time it takes clients to pay invoices.
4. Offer more than one payment option
Not a lot of people carry around checks anymore, which is why offering multiple ways for clients to pay makes payment collection easier.
The more convenient and easy it is for a client to pay you, the more likely you are to collect payment on time. In addition to cash, offer a variety of online payment methods such as ACH payments (bank transfers), e-transfer, debit or credit card payments—bonus points if you include payment links in your invoices or a “Pay Now” button on your website.
On the job, you can even facilitate mobile payments through Google Pay and Apple Pay if clients prefer to use them.
Finding payment processing software is a good first step if you are unsure how to start collecting customer payments online. Using software like Jobber, you can accept credit and debit payments from your phone or computer, taking your business to the next level and making you more attractive to potential clients.
Pro Tip: List the different payment methods you accept in the payment terms on your quotes and invoices to make it easy for clients to find.
5. Have clear payment terms
Collecting payments relies on clear communication about your payment terms. Every invoice you send out should include payment terms that cover:
- The date the invoice was sent
- The total amount due, including taxes, fees, discounts, and deposits
- The payment deadline
- Your accepted payment methods
- Instructions for making a payment
Pro Tip: Sum up this information in the email you attach your invoice to, making it even more convenient for customers.
6. Provide early payment incentives
The only thing better than a timely payment is an early one. Payment incentives encourage clients to make payments before they’re due, saving you from having to send reminders and follow-ups for late payments and unpaid invoices.
Collect money from customers early by using these common incentives:
- Offering a 5% discount for payments received by a certain date
- Offering a 10-20% discount on a future service
For recurring billing, like clients who get weekly or monthly services, consider offering a discounted rate if they prepay or allow you to keep their credit card or bank information on file.
With the customer’s permission, payment processing software like Jobber stores this information and allows you to bill it when a service is completed, saving you from having to wait for the client to make a payment.
7. Offer flexible payment schedules
Collecting payments from customers is even more challenging on higher bills since customers may lack the funds to pay them all at once. Offering financing is a good way to ensure you get paid and the customer can cover the costs of your services.
Financing lets customers make installments on larger invoices instead of requiring a lump sum payment. This helps ensure at least some cash flow and attracts clients working on specific budgets.
To offer financing options to your customers, you can either do it yourself by dividing your invoices up over a few months or using a lending partner like Wisetack.
For example, if you decided to handle it yourself and a client had a $1500 bill due for an HVAC job, you could allow them to make five $300 payments over the course of the next five months.
If you went with a lending partner instead, the customer would pay you in full using credit from the lender and then repay them over time.
8. Follow up on invoices
Follow-ups don’t need to wait until an invoice is past due. On longer payment cycles, like 30 days, consider sending a reminder a day or two before payment is due to nudge your client.
But even if you do everything right, there’s still a chance your client won’t make a timely payment. If a client completely misses their payment due date, send a reminder the day after it’s due to let them know.
Use software like Jobber to automate this process and automatically send reminders for unpaid invoices. Or, do it manually by tracking due dates and missing payments yourself.
9. Try different contact methods
If you’re trying to collect money from a customer who is unresponsive, it might be time to try another way of getting in touch. For example, if you’ve only been reaching out via email, it could be that your messages are going straight to their junk folder or that you have the wrong address.
Instead, try giving them a call, sending a text, sending a letter, or leaving a notice at their home.
If the customer is another business, try contacting someone else from the company. It’s possible that your contact could be on vacation, switched jobs, or that their department doesn’t handle payment.
10. Automate your payment process
Keeping track of estimates, quotes, invoices, deposits, and payments is a lot of work. With so many tasks to track, document, and check off, it’s easy for things to slip between the cracks. And, the more you do on paper, the harder it all becomes.
Automating your payment process, from creating quotes and invoices to accepting payments and sending reminders, makes collecting payments easier for you and your clients. It also prevents human error and ensures that any and all payments are accounted for in case you ever need to confirm whether one was made.
Originally published in July 2017. Last updated on October 24, 2024.
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