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Getting paid on time: Financial planning advice for your small business

December 7, 2018

You’re doing everything right. Your products are wildly successful. Your services are getting rave reviews. But you can’t get your best customers to pay on time. What gives? Why are you not getting paid?

Business owners know that getting paid on time is critical to maintaining a healthy cash flow. In fact, one of the great struggles of small businesses is getting customers to pay on time.

The answer to slow payments and cash flow problems may lie in one or more of these 5 problems. It’s time to dust off the ol’ magnifying glass, grab a vintage pipe, slap on a Sherlock cap, and do some sleuthing.

Problem 1: Vague or No Payment Policy

Have you crafted a clear payment policy that works for you and your customers? Have you spelled out that policy clearly in your contracts? Setting good terms and conditions at the beginning of a transaction or project is critical to getting paid. Be clear about when customers should expect to make a payment or downpayment, what methods they can use to pay, and late payment penalties or early payment incentives. And be sure to put all this information in writing, so your customers have a realistic understanding of your policy and how it affects them.

Problem 2: Disorderly Invoicing

In the daily hubbub of running a small business, it’s easy to let invoicing slip. Your customers are good for the money, and a slight delay in payment won’t matter much, right? Wrong. If money’s not coming in on time, you could lose track of what’s owed to you. Worse, you may not be able to pay your bills when they’re due. That puts your cash flow and your business at risk. Check out this invoicing checklist to stay on-track.

Do you …

  • Have a schedule? Schedule time each week or month for invoicing, and stick to it.
  • Know who owes you what? Keep a running list, a tab, or a spreadsheet of what customers owe you. Fortunately, Clover’s got you covered with handy apps like Cash Log and Insights.
  • Have correct contact info? Be sure you have up-to-date customer contact information for your invoices. Wrong contact info can mean delayed payments. And delayed payments impact your cash inflow.
  • Know your customer’s payment cycle? If you own a business that services large organizations, it’s important to understand not only who’s responsible for paying your invoices, but the process and timeline they typically follow.
  • Provide clear explanations? Invoices should provide a clear explanation of services, charges, and other relevant details about the products or services your customers purchased—especially add-on fees. The more questions you answer up-front, the faster the payment process.
  • Explain your terms? Whether it’s a 3% or 10% penalty for late payments, noting penalties for late payments incentivizes customers to pay on time. And because it’s not unusual for customers to pay just outside the customary 30-day window, consider shorter-term payments like a 10- or 20-day payment window. Or, blow customers’ minds by offering incentives for making a partial or full payment before an invoice comes due.
  • Offer convenient payment options? Writing a check and putting it in the mail may work for some customers but not for others. The easier you make it for customers to pay you, the more likely it is you’ll get your money on time.
  • Brand your invoices? Clearly identify who’s sending the invoice. Consider invoices yet another opportunity to build your brand with customers.
  • Use digital tools? InvoiceASAP and InvoiceAble work with Clover devices, most mobile devices, and desktop computers to create invoices and accept credit card payments. To move customers toward digital payment options, consider offering a small incentive for going paperless.
  • Set automatic reminders? We all forget some things sometimes—especially bills. So setting reminders may be the ticket. Offering a tap on the shoulder may help chronic late-payers remember to make that payment sooner.

Problem 3: Limited Payments Options

For some businesses, like food vendors and coffee shops, cash is still a gold standard and a preferred method of payment for some customers. But have you ever stood in a long line at a shop only to realize the hold-up? It’s cash only. That’s fine if you’ve happened to stash cash in your pocket, but it’s also just enough of a delay for a vast number of card users to walk. Payment technologies are transforming shopping, eating at food trucks, and more, so consider adapting cashless payment options, even if you’re not in retail, to prevent payment slowdowns.

Be sure to optimize your business for faster payment delivery. Peruse 4 ways to get your funds faster.

Problem 4: No Short-Term Credit or Back-Up Cash

What happens if your biggest customer pays late? Do you enough cash on-hand to pay your employees, utilities, or vendors? Do you have ready access to quick cash for your small business?

Small businesses often turn to local banks for an infusion of funds. But getting a traditional bank loan often means taking time to fill out an application, pulling at least two years of documentation together, and running a personal credit check. The net result for almost 80% of small businesses is a rejection.

That’s where alternate cash sources like crowdfunding, angel investors, and even invoice factoring companies, can help. For even faster funding, check out Clover Capital. It offers a simple 1-page application process with funds hitting your account in as little as 3-5 days after you’re approved. The best part? You repay the loan based on your sales.

Problem 5: No Ps and Qs

Cultures change, languages evolve, and manners morph. But customers still value appreciation. In hurried business schedules, it’s very easy for business owners to become so focused on what they’re doing that they overlook why and for whom they’re doing it—the customer.

Little acts of kindness, like a thank you on an invoice, a handwritten note, or a friendly call to follow-up on a late payment can translate into better customer relationships, and better relationships can translate into more business. If you invoice by email, keep in mind these email dos and don’ts. When it comes to getting paid, the little things matter.


Clover is sold by leading U.S. banks including Bank of America, BBVA, Citi, PNC, Sun Trust and Wells Fargo. You’ll also find Clover at our trusted partners including Ignite Payments, Restaurant Depot, and Sam’s Club. For more information, visit us at clover.com.