Struggling to get paid on time?
Having spoken to a number of suppliers recently, its clear that couples are delaying the payment of progress or final invoices due prior to their wedding.
My best guess is that this is because they are still unsure as to whether their wedding will go ahead, whether by choice or because of Government restrictions. Meanwhile, you’re still incurring the costs of running your business, and you are no doubt continuing to provide goods and services to them in the lead up to the wedding day itself.
Here is my advice on getting couples to pay their invoices on time:
Once an invoice becomes overdue, send a friendly email first to request prompt payment. Afterall, you’ve completed the work - you should be fairly compensated within agreed timeframes. Make it short, polite and professional. See if your accounting software does this automatically, so you can set and forget. Most client management software has this function. Follow up emails are key to getting paid on overdue invoices;
Contracts are king. Ensure your terms of service and for payment are clear, non-negotiable and have a process for dispute. Your contract should settle any disputes before they arise.
Back your contract up with a debt collection policy. Many successful businesses follow a “3 strikes” rule whereby if your client hasn’t paid by the 3rd request, debt collection ensues. Or, worse still for couples, you simply won’t perform the rest of the services - including the refusal to attend and work on their wedding day.
Offer a payment plan. List it on your invoice and in your contract, and discuss it with your client. This will strengthen the relationship with your client and give them more opportunity to pay on time.
Don't forget to collect your deposit (or non-refundable booking fee, however you choose to name it) and be clear what the deposit covers.
Impose late fees or interest for non payment - no one wants to unnecessarily pay more money than they have to for a service. Just be sure that your late fees are reasonable, or Australian consumer law agencies won’t be impressed.
Get your invoicing system to do the dirty work for you. Because nobody likes a ‘Nagging Nancy’ - but you can’t argue with a computer.
If your clients still don’t pay after 3 reminders and debt collection letters, consider if it’s worth “taking further”. Small amounts may not be worth chasing but large amounts can be handled via the small claims tribunal in your state or territory (up to $10K). Anything over $10K might require the services of a legit lawyer. Let’s hope it never gets that far - but you know where to find us if you need us.
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Purchase our Letter of Demand package which provides you with the templates you need to politely but firmly request prompt payment from your clients.
