The Mindset Shift Business Owners Need to Get Paid Quicker
Do you have the right mindset to get paid quicker?
“Cash is King” and “a sale is not a sale until it’s paid for” are mantras to live by for the business owner.
We all know it’s crucial to receive payments from clients and customers on time to maintain a steady cash flow and ensure smooth operations. Experiencing delays or missing payments can create undue stress and hinder progress towards growth.
So why is it so difficult to ask for payment for some of us?
If you’ve never been paid late by a customer or client, you may wonder what all the fuss is about. But, for some of those that have, asking for payment can be an incredibly distressing experience that they try to avoid at all costs!
Even if you’re not the one doing the chasing in your business, your mindset will set the tone for how the business deals with late-paying customers or clients.
There are several psychological factors that can contribute to our discomfort or hesitation in discussing money. Below we reveal five of them and explore some of the tools we can use to get past them.
Fear of Rejection or Conflict
Asking for payment involves a direct request for money, which can be perceived as confrontational or awkward.
Many people have an inherent fear of rejection or conflict, and asking for payment may trigger those fears. You may worry that the client or customer will dispute the payment or be dissatisfied with the service provided, leading to potential conflict.
Valuing Your Worth
I’m sure all of us at some time have experienced Imposter Syndrome, and this may cause us to undervalue our own work. As a result, you may feel uncomfortable asking for fair compensation for your goods or services. You may worry about being seen as greedy or overpricing your offerings, leading to a lack of confidence when discussing payment.
Difficulty Discussing Money
Money is often considered a sensitive and private topic, even in business transactions. People may have personal discomfort around discussing financial matters, which can extend to asking for payment. Cultural norms, upbringing, or personal beliefs may influence this feeling of discomfort towards money.
It’s important to maintain a positive relationship with clients or customers. However, requesting payment can feel like a potential strain on the rapport that has been built. There may be concerns about coming across as overly transactional or damaging the trust that has been established.
Lack of Assertiveness
You may find it difficult to assert yourself when it comes to discussing financial matters. You may be reluctant to ask for payment or hesitant to follow up on overdue payments, fearing that you might appear too forceful or aggressive. This reluctance to assert oneself can lead to delayed or incomplete payments, which can negatively impact the financial health of your business.
If you don’t nail this and get your cash flow under control, it could mean curtains for your business. So, if you identify with any of these traits, or even if you don’t, what actions can you take?
Remember, it’s Your Money!
It’s important to recognise that your offerings play a vital role in your client’s achievements and development. As long as you’ve fulfilled your obligations without any issues, there should be no reason why you shouldn’t receive payment.
To avoid payment delays, it’s important to be proactive and set up efficient systems and processes. This includes establishing a streamlined process for onboarding new clients and customers, invoicing, and credit control. Utilising accounting software can also be helpful in providing valuable insights about your finances, such as outstanding payments. Don’t wait for issues to arise – take action to prevent them.
Set Clear Boundaries
When dealing with payments, it is crucial to establish clear and concise boundaries. To ensure that your clients understand what’s expected of them, establish a payment policy that clearly outlines the terms, due dates, late fees, and consequences for non-payment. During contract negotiations, it is important to place emphasis on these terms and make sure that clients agree to them (your Ts & Cs). This sends a message that prompt payments are mandatory and non-negotiable.
Take Prompt Action
To prevent delays or missed payments, you must address any issues early on. It’s important to reach out to your clients or customers as soon as possible to discuss concerns and work together to find solutions.
It’s crucial to avoid allowing late payments to accumulate and never to become complacent about getting paid. The worst-case scenario is a client accumulating a large debt and then going out of business, resulting in a significant financial loss for you.
By consistently following up, you can promptly resolve any issues and ensure timely payments, maintaining a steady cash flow.
Foster Open Communication
While chasing late payments can be frustrating, approach the situation with empathy and understanding. Adopting a calm and respectful tone in your reminders and follow-ups will help maintain a positive working relationship while asserting your commitment to prompt payment.
Remember, effective communication doesn’t have to sacrifice professionalism. By being approachable and understanding, you encourage clients to prioritise your payments and be open and honest with you about any challenges they may be facing.
Focus on problem-solving rather than confrontation.
Monitor Cash Flow Regularly
As a business owner, it’s crucial to maintain a healthy cash flow for long-term sustainability. Keep a close eye on your cash flow, stay on top of outstanding invoices, and promptly address any potential issues. Being fully aware of your financial situation gives you the power to be proactive in managing timely payments and making well-informed decisions.
Get Expert Support
Making sure that payments are made on time is a matter of having both efficient systems and a positive attitude. But you don’t have to go through the payment process by yourself. By consulting with experts, you can receive valuable advice on how to improve your systems. With their knowledge and guidance, you’ll be able to implement effective strategies that will simplify processes, minimise payment delays, and handle cash flow in an efficient manner.
If you’d like to learn more about how we can support you to achieve prompt payment and positive, predictable cash flow, book a call with Nicki.