CONTENT HUB > Practice Management >
Oct 4, 2021 5 min read

8 Ways To Encourage Your Clients to Pay on Time

Getting late-paying clients to shape up can be tricky. Here are some strategies for encouraging your clients to pay on time—or even early. Learn more here.

8 Ways To Encourage Your Clients to Pay on Time

Accounting practices are like most other small businesses when it comes to managing cash flow. If your clients aren’t paying what they owe you on time, you may have difficulties in paying your own bills and making payroll. Few things are more awkward than having to contact a client repeatedly to pay up. Not only does it make you feel uncomfortable, but it can put a strain on the relationship you’ve worked so hard to build with the client. 

It is extremely frustrating to deal with clients who pay late, and it may seem as if there’s not much you can do to improve things. However, there are plenty of ways that you can clear away the obstacles that prevent your clients from making their payments on time and in full. Here are eight strategies you can implement to get your clients to pay on time.


1. Examine your current payment policy 

Do you have a clearly defined payment policy? If clients don’t know what your policy is, you can’t really blame them for not paying when you expect them to. A payment policy can also act as a guide for you to communicate with clients about missed payments. The best strategy is to make your payment policy clear to every client as you begin the business relationship.



2. Establish rewards and penalties

Give clients an incentive to pay by implementing rewards for paying early and penalties for late payments. For example, many businesses offer a discount for paying early. It means forgoing a little income initially, but it may be worth it to get paid more quickly. For example, some businesses offer a discount of 2% for paying seven days early, or 5% for 14 days early. Either way, you’ve got to balance a loss you can live with and a percentage that’s attractive enough for clients to want to pay early. The most effective no-payment penalty is a late fee and avoiding that is often what motivates clients to pay on time.


3. Implement electronic invoicing 

Millions of Americans make a large part of their bill payments electronically, and there are a lot of resources for your tax practice to use concerning online invoicing. Look at software that sends out electronic invoices and allows customers to pay online as well. The integration of electronic payment options directly within the invoice is a fast and convenient way for clients to take care of their obligations. 



4. Be clear on when payment is due 

Every invoice you send to clients should clearly show the date that payment is due. Too often, businesses hide this important information in a paragraph of text or don’t include it at all. For example, insert something like “Payment is due within 30 days of receipt of this invoice” on every invoice. Set it in bold font or enclose it in a box so it’s hard to miss. 


5. Make payments as easy as possible 

Don’t create an obstacle for your clients to get their payments to you. Instead, make it as easy as you can for clients to use their preferred payment method. Set things up so that your practice accepts multiple forms of payments, including credit cards, PayPal, auto payments from a bank account, digital payment via ACH, and EFT transfer payments.


6. Send emails before and after a missed payment 

It’s a good idea to send out a reminder email about payment a few days before invoices are due. Just like everyone else, your clients probably get flooded with dozens of emails every day, so the reminder often helps. If the client has missed a payment deadline, contact them via email as soon as possible. Don’t wait, hoping that the “check is in the mail.” Send out an email specifically but objectively notifying customers of your payment policy.



7. Invoice more frequently 

Clients are more likely to pay a small invoice on time than a larger one. Therefore, many companies bill on a regular basis. Instead of letting large amounts accrue, you can bill your clients on a set schedule, such as every two weeks. Remember to include your early-pay incentive in the communication to give them extra motivation. You’ll need to find that fine line between invoicing too often and not often enough, so the client won’t get confused and miss a payment.


8. Create an individualized plan

If none of these strategies are making a difference and your client is still not paying their invoices, consider that client’s situation individually. If this one late client usually pays on time, then maybe the late payment is just a temporary hiccup that will be quickly corrected. However, a pattern of several late payments or non-payments from a client may indicate an issue you need to address soon. Talk to the client and see if you can work out a payment plan that’s acceptable to both of you. If finances aren’t the issue, you might have to face the fact that it’s not worth your time and effort to keep working with a client who can’t or won’t pay on time. 

You'll likely have to deal with late-paying clients at some point. If you’ve implemented steps to get clients to pay on time, but have no success with certain accounts, you must take steps to end your professional relationship with them. In other words, you must cut off your client and cease doing work for them until you receive the money. Severing the relationship may be the final incentive they need for them to pay so you can move forward once again on their account. If all else fails, this move also prevents you from donating even more of your tax practice’s time and talent to an unreliable client.

Interested in more client management tips? Check out this blog post, 8 Simple Ways to Manage Clients Efficiently. 


Canopy is a one-stop-shop for all of your accounting firm's needs. Sign up free to see how our full suite of services can help you today. 
Start your free trial today

Get Our Latest Updates and News by Subscribing.

Join our email list for offers, and industry leading articles and content.