Getting paid
Today, I took part in an awesome panel discussing b2b payments trends in 2024.
Will share more on the conversation soon (the video will be released in a couple of weeks!)
But I wanted to share something I realized during the conversation.
Call it, the Getting Paid Factors Framework:
What factors make it more or less likely that your clients or customers will pay you quickly?
Leverage: What reason does your customer have for paying you? Are you able to hold onto the last deliverable until the final payment? Is this part of an ongoing essential service? Is your product needed for their operation? The higher your leverage, the faster you get paid.
Industry norms: Most industries have a certain "Net Payable Days" that's typical. "Net 15" might be normal in, say, freelance copyediting, but anything less than "Net 90" might be completely outlandish in other markets. Unless you're selling something REALLY special, it's hard to buck the norm, whatever it may be.
Deal terms: How you structure your contracts has a lot of influence on how long it takes to get paid. Some companies negotiate looser payment terms in order to close a deal, but those terms can come back to bite you. Like, when it's time to get paid but your customer claims they don't owe you because the work hasn't been "approved" yet! Meanwhile, early payment incentives and late payment penalties can really speed things up.
Ease of transaction: Creating a seamless checkout experience can play a huge role in faster payment. Accepting credit cards, automated subscriptions, one-click payments, and flexible options all lower the friction of customers paying the bill. Lower friction means faster payment.
Follow-up: The squeaky wheel gets the oil. Following up on payments with reminders is essential. Automated messages from your invoicing system will often suffice, but if they don't, a personal note or call may be what it takes to get that cash in the door.
Do you ever struggle to get customers to pay? What tricks or systems do you use to collect what you're owed?
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