My small business has a mix of B2B and B2C clients. When a new client signs up we always ask them what their preferred payment method is. Most people reply with “credit card” or ‘bank transfer’. But on several occasions now clients have replied with “invoice”.
What on earth are they thinking? An invoice is a document detailing what they are being billed for. 100% of our clients get an invoice, but it is not a payment method.
Why do people think that an invoice is a payment method??
We sent invoices on the last day of the month for next month’s service. Payment terms: “Due Upon Receipt”.
Our clients flipped at first. Obviously they didn’t read the service agreement. They complained about paying before they received service until I explained service like telephone, mobile, Internet bill the same way.
I found after we made calls for 3 months in the 3rd week of the month, we started receiving payment quicker; ~50% before end of wk 3 and ~75% during wk 4.