Waiting for checks to arrive and clear, awkwardly reminding clients about overdue payments … situations like these can create stress and delays in getting hard-earned payments into your business account. They’re also unnecessary, thanks to easy-to-use online invoicing and payment tools and a few simple strategies. Here we share six ways to get paid faster and maintain consistent cash flow while increasing overall efficiency.

1. Offer online payment options.

Payments via check have been steadily declining in recent years, according to the Federal Reserve, for several reasons. In addition to the ever-present risk of mail and identity theft, paying by check takes time and effort. The client has to hand-write a check and drop it in a mailbox, and then you have to wait around for it to arrive and clear. Large payments might even require an in-person trip to the bank.

As Brad Young, owner of TigerTown Home Improvement in Columbia, Missouri, puts it: “How frustrating would it be if you went to a website and you wanted to buy something, but you had to mail in a check for it?” 

So it’s no wonder that the use of credit cards and automated clearing house (ACH) transfers has been steadily on the rise. In fact, 90% of homeowners say that paying online is their preferred payment method for remodeling projects, according to Houzz research. When you accept payments online, you give clients the ability to pay more securely, easily and quickly. How quickly? With Houzz Pro’s online payment feature, you can receive your money within two days via ACH transfer or three days via credit cards. Or you can opt to reduce the transfer wait time to just minutes with instant payouts to your bank. Whether you manually opt in for one specific payment or choose to automatically receive all client payments instantly, you hold the reins to how fast your money moves. With clients and pros on the go, you can also take contactless payments with Tap to Pay on iPhone, and use your phone to accept payments directly from clients in-person. 

Moreover, when you use Houzz Pro’s invoicing feature, payment reminders will go out automatically based on the payment schedule you set. And you can efficiently keep track of which invoices have been paid and which are outstanding.

2. Make invoices easy.

If you’re reinventing the invoicing wheel with every client and printing out hard copies of every invoice, you’re wasting valuable time. 

Make things easy on your client and yourself by taking advantage of Houzz Pro’s invoicing features, which let you:

• Use customizable, professional-looking invoice templates
• Easily convert estimates into invoices
• Break down payment requests into installments — meaning smaller payments at a time for clients and more consistent payments over the course of the project for you
• Create a custom payment schedule with automatic reminders
• Keep invoices in one digital place for efficient tracking and accounting
• Create hassle-free change orders
• Save paper and ink

Also check out our free invoice templates for home remodeling, architecture and interior design, and learn more about ways to prevent missed payments.

3. Embed transaction fees in your markup.

Many retailers build the cost of payment processing right into their product pricing, and customers don’t bat an eye. So consider building transaction fees (1% for ACH transfers and 3.5% for credit cards through Houzz Pro) into your overall markup. If a client believes in you and wants to work with you, this small amount likely won’t deter them. You can also remind clients about earning points or building credit via credit card use.

For Young, the fee is “just part of me calculating my cost of doing business,” he says. “It’s a customer service feature. If it costs me a little bit on a job, fine. I’ll make it on another job.” 

If you’re striving for competitive pricing and you don’t want to add that small extra amount to your bid, you can offer clients the option of paying online and assign the transaction fee to them as a line item. Or you can simply absorb the cost yourself. Houzz Pro gives you full control over how you manage your online invoicing and payments. You can edit your payment settings, set a cap per transaction and control which payment method is available to clients depending on the transaction volume.

4. Offer an incentive. 

Makeup companies often throw in gifts with purchase. Banks offer cash for opening certain types of accounts. Car dealers pull out all kinds of add-ons from their bag of tricks to get customers to buy. The power of the incentive is real. So consider offering your clients a pricing discount for paying quickly. For example, you might slash 3% from the amount due if they pay an invoice within 10 days.

If every dollar counts but you have spare time, you could offer a minor free service as an incentive instead. For instance, you could suggest trading a free consultation for something you’d normally charge extra for in exchange for a fast payment.

See more about how to ensure on-time payments and handle any nonpayments in this article.

5. Charge late fees.

Late fees are often written into contracts but ignored in practice. If you’re not already including late fees in your contracts, start right now, and if you’re already including them but not enforcing them, also start right now. Negative reinforcement can work just as well as positive incentives when it comes to on-time client payments, and many types of businesses (notably credit card companies) automatically add late fees to overdue payments. Just be clear in the contract and on the invoice about the payment schedule, when the late fees will kick in and what the percentage is — for example, a 3% late fee added after 30 days. 

While at first it might seem hard-hearted to charge late fees, it’s merely a sound business practice — and would your clients be happy if your business practices weren’t sound? You have to pay your suppliers and contractors on time, and your clients have to pay you on time, plain and simple.
Curious about how Houzz Pro can help you get paid quickly and improve the efficiency of your financial tracking? Start your free trial today.