Getting Clients to Pay On Time

We are a small business. We invoice once a month, for services performed in the previous month. Our payment terms are “due on receipt.” Some clients pay accordingly. Others have tended to lump us into the “net-30” category based (my ass-u-mption) on the terms they receive from other vendors. A few others appear to have a “squeaky wheel” folder, aka don’t pay until someone is bugging them repeatedly to pay.

rotten-neighbor.jpgYears ago I contemplated putting up a web site called “theydontpay.com” that would serve as a sort of small business Dun & Bradstreet service. Small business owners could post their experiences of companies with a bad record of not paying, so other small companies could check out a potential client in advance. Back in those days, we had a few big names you would think would be an asset to the client list. But in reality, they had a high P.I.T.A. score often based on refusal to pay normal invoices. The concept was very similar to another social media site I recently discovered, RottenNeighbor.com. (I could have some fun there!)

Since I was too busy to do that, and am wary in general of putting out stink eye for all the world to see (I prefer Aloha), I decided instead to offer positive incentives. I’ve been having fun, but have to report that it has only made the good clients better and not the “bad” clients better. The first month was a 10% discount to the first payment received. We accept and encourage electronic payments so the first payment was delivered in less than 20 minutes by a nonprofit client, NAWBO. I reported that in my next monthly mailing.

The next time I offered a free $10 iTunes Gift Card to anyone who left a comment on our blog. This was to also help our clients get more comfortable leaving blog comments and hey, do any of you not love getting more blog comments?

Guess what? Only one person played. Meredith of HereComesTheGuide.com was stoked, and I extended it some because she actually left two comments! I sent her a $25 gift card that also donates 10% to AIDS relief in Africa (link has expired). (I hope that link survives outside of my browser cookie settings…)

This month, I am offering a more generic BareFeetShop/Amazon.com $10 gift certificate and link love to all those who tell me about a blog they read and why. (And I even encouraged them to get staff involved.) Early congrats to Andy at Packet Analytics (link has expired) who replied in less than 15 minutes! I’ll compile the results here in a few weeks.

Wish me luck. I’d sure like to find out what the tipping point is to get old invoices paid. (You know who you are, though I wonder if you read our blog. Please contact me privately to tell me about your sweet spots.) I am all ears to the rest of you who have fun ways to help clients pay on time and feel so good about it they’ll want to do it over and over again.