Seven tips for how small businesses can get paid faster

If there's one thing small business owners have in common, it's that they want to get paid as quickly as possible. It helps keep cash flow healthy, which is no small feat. In a recent SMB & Money Survey performed by WePay, 41 percent of small business owners say they have experienced cash flow challenges.

But how can you get paid faster? As with most long-term goals in running a small business, preparation ahead of time can help prevent pain down the road. Consider incorporating these seven tips for collecting payments in a timely manner.

1. Be organized.

First, it's important to have a system for invoicing. Avoiding delays in invoicing can help avoid delays in getting paid. Cloud-based accounting software makes the invoicing process easy and predictable, and lets you send invoices from anywhere. Accounting software today is also designed for ease of use, even if the user has little or no accounting background. Popular options available at a low cost or for free include QuickBooks, FreshBooks and Wave Accounting.

2. Choose a payment plan that works best for you.

Determine when you need to be paid to maintain a healthy cash flow. For instance, if you absolutely must be paid within thirty days, make the due date two weeks from the day the customer receives the invoice. You may also consider asking for retainers, deposits or full prepayment.

3. Consider providing an online payment method.

Many customers appreciate the convenience of paying online. Select a provider that charges reasonable fees. Popular options include PayPal, Square, WePay, Popmoney and Heartland Payment Services. Another option for online payment is accounting software like QuickBooks, which can accept credit card payments and bank transfers automatically to your bank account.

4. Put it in writing.

Use a payment agreement that contains your payment expectations in plain language, and make it available to the customer before goods are sold or work is performed. Customers should understand when a payment is due, and what steps may be taken if they don't pay on time. So if you plan to charge late fees or stop ongoing work, make that clear. Online small-business legal resources such as LegalZoom provide contract templates that make protecting your interests a little easier.

5. Send scheduled reminders

We understand it might seem tedious to send payment reminders, especially after you've sent the invoice. A customer relationship management (CRM) system can automate the process for you. Popular CRM systems for small business include HubSpot, Salesforce and Zoho CRM.

6. Hold your customers to the written agreement.

A missed payment may very well be an honest mistake. Remind your customer of the agreed-upon payment terms while maintaining your professional demeanor in an email, a letter, or a phone call. Consistency is important. However, if you have a good customer struggling with money due to a temporary circumstance, consider working with them on adjusted payment terms.

7. Consider incentivizing early payment.

Some small businesses offer a discount of up to 2 percent for early payment. This could reduce the stress on your business caused by late payments. Of course, the discount should only be offered if profit margins allow.

Timely payments contribute to a healthy cash flow. By following the seven tips above, you can help maintain the cash flow you need to keep your operations running smoothly.

Disclosure: The information in this article has been obtained from sources deemed reliable; however, we do not guarantee its accuracy. This information is not intended to be legal, investment or tax advice and should not be relied upon. MB Financial Bank, N.A. and its affiliates do not provide legal or tax advice. You should review your particular circumstances with your legal and tax advisers. Member FDIC

• Stephen Ball is SVP and business banking manager at MB Financial Bank.