How often do you have to deal with late-paying customers?
If you’re like most other independent staffing agencies, you’ll notice that some of your clients like to take their sweet time when it comes to paying up.
Needless to say, your new business requires a steady cash flow to thrive – and these unprofessional late payments can really add unwanted stress and worry to your already busy process.
Fortunately however, there are steps you can take to get even your most tardy of clients to pay you on schedule. Here are some effective things you can do:
Offer a reward to those who pay on time.
By offering an incentive for those who pay on time consecutively for a certain period of time, you’ll be encouraging timely pay in a way your clients can really appreciate. For example, if you offer a small discount to your clients who pay on time every time for so long (e.g. within a fixed two-month period) – or an even greater discount to those who pay earlier, you’ll see how much of an impact this little incentive makes.
Send friendly updates and reminders.
How often do you keep in contact with your candidates, or remind them that a payment is due? If you send out a gentle reminder shortly before the due date via e-mail (which can be easily automated), you can expect more on-time payments because not only will your candidate be reminded, but they’ll be made aware that you haven’t forgotten, either. Try to also keep up communication with your candidates in general by sending them regular updates on their application status. This will promote a positive overall candidate experience crucial for success.
Put a late-payment policy to use.
It is common for staffing firms to enforce a late-payment policy stated on invoices that will inflict interest charges on late payments. But in order for this to succeed at getting clients to pay on time, it should be regularly enforced and actually put into practice – because it’s one thing to have a late- payment policy and another to actually use it. (Many agencies are guilty of not actually following up on their late-payment policies)!
Shorten your payment term timeframe.
Many staffing agencies have rather long payment periods (up to a few months) – which can make it easy for customers to forget when their bill is due. If you tighten up your payment timeframe to require payment immediately after the completion of a service, you’re likely to experience less forgetfulness – and more timely payments.
Use payroll funding from a back office support team.
A back office support provider with payroll funding such as The Agency Support Partners will handle all of the payment issuing and collecting for you, so you can focus on other things that matter (and that are less stressful). Contact us today to learn more!