Ways To Ensure You Get Paid by Customers and Clients

Proactive Policies Are the Secret To Getting Paid

Female business owner counts money at a table with pen and paper while drinking a coffee

Onuma Inthapong / Getty Images

Have you ever worried about getting paid by a client or customer? Whether it's customers who are running overdue accounts or a client who seems to be reluctant to pay for the job completed, not getting paid is one of the most frustrating aspects of running a small business. And, when not getting paid impacts your cash flow, it can be one of the most dangerous aspects, too.

Here are several ways to make sure you're getting paid for the goods and services you sell.

Key Takeaways

  • The best way to ensure you're getting paid for the products and services you sell and provide is to put proactive policies and procedures in place.
  • Have credit policies in place, perform credit checks when needed, have a partial payment policy, and be clear and upfront about your payment expectations.
  • A reward system may entice clients and customers to pay you on time.

Don't Extend Credit Automatically to New Customers or Clients

Small businesses, just like large businesses, need to have credit policies in place that provide guidelines for determining which customers or clients will be extended credit and on what terms.

Learn the process for how to run a credit check before agreeing to lend anything to a client or customer. It may be your business's policy, for instance, to never accept personal checks as payment, but only cash, debit, or credit cards.

If you are considering extending credit beyond that point to individual clients or customers, you should have a procedure set up where the customer or client has to fill out a credit application and/or agree to a customer credit check.

The fee for a credit report may range from credit bureau to credit bureau—Experian charges $14.95—and the customer is the one who pays for it after making the request and then sharing it with you.


If you want to get a credit report for a potential client or customer, you can always offer to pay for it or put in writing that you'll pay them back after it's requested and shared with you.

A credit report will help you see whether this customer or client is someone who has paid back money on time and in full in the past. If they haven't, you may not want to extend them credit upfront—or work with them at all.

Take Partial Payment in Advance

Worried that you won't be getting paid for that sale or service? If it's sensible in terms of the price of the goods or services, ask for a deposit or retainer upfront. This is an increasingly common business practice for higher-ticket items and services; no reasonable customer should be offended by such a request.

For instance, if you provide services, you might charge a percentage of the projected bill or a set amount as a retainer before you start to work on a project with the remainder due on completion of the task. Or break the bill into thirds, asking for a third before work starts, a third halfway through the project and a third upon completion.

The beauty of partial payment is that it ensures that you get paid something even if the customer or client defaults on the rest of the bill.

Invoice Promptly

Customer/client invoices should be prepared and presented immediately upon delivery of your goods or services to the customer or as soon as reasonably possible. Not doing so can make your business look indifferent to getting paid and slow down your cash flow for no reason. Waiting to prepare your invoices at the end of the month, for example, you may be adding as many as 30 extra days to your cash flow conversion period. Small business accounting software and POS (point-of-sale) systems help make invoicing easy.

State Payment Terms Visibly and Clearly

If you like getting paid promptly, don't leave it up to the customer or client to decide when your invoice should be paid. Rather than giving them invoices that say vague things such as "payable upon receipt," make sure your invoices state specific payment terms, such as "payment due within 30 days" or "Due Date: 30 days from receipt."

Reward Customers for Paying Promptly

Waving a carrot at customers or clients, such as offering customers a discount for paying their invoices early, can help you get paid more quickly too. For instance, if your usual policy is to have payments due in 30 days, offer a small discount such as 2% off to customers who pay within 14 days.

Establish a Follow-Up Procedure for Customers Who Miss Payments

The more quickly you follow up on a missed payment, the better your chance of getting paid. So set up a system for flagging late payments if you need to and a standard procedure for contacting the customer or client when his or her payment is late.

Nowadays, there are many channels that you can use to contact the customer. However, some are more effective than others. If time allows, start with a phone call to "touch base" with the customer or client. Sometimes the person has just forgotten or missed seeing a bill and a quick phone call is all it takes. It'll also mean you could get paid without having to go through any of the rest of the collections procedure.

If time does not allow or if a phone call is unsuccessful, the next step of your collection procedure starts with an email or letter that simply states the bill is overdue and requesting the customer's immediate attention to the matter and then moves through a series of collection letters expressing increasing concern.

Sending collection emails automatically creates a copy of the collection letter for your files—and automatically timestamps your message. But because of email filtering and email overload, it may not be a very effective way of getting your collection letters to customers and clients. You'll want to send them in other ways, too, such as regular old snail mail, fax, or even courier, depending on the size and importance of the debt.


If there is no response from a customer after you send a collection email, you are left with choosing between writing off the bill as a bad debt or turning the account over to a collection agency.

Turn Over the Overdue Account to a Collection Agency

Unfortunately, even when you use all of these proactive ways to get paid consistently, you'll still have some overdue accounts. When all of your other tactics don't work, it's time to send the account to collections.

Collection agencies collect debts for a fee or percentage of the total amount owed. This fee is based on how old the debts are (the fresher the better) and how much business a creditor has to offer. The standard rate in the industry is 20%. The rate for collecting consumer accounts may be higher.

However, collection agencies have experience with and knowledge about debt collection that we, as individual business owners, may not have. Hiring one may be well worth it if the number of outstanding accounts receivable warrants it.

If you do hire a collections agency, be sure that the collections agency you hire is fully licensed and bonded in your area.

Frequently Asked Questions (FAQs)

What is the best way to collect payments from clients?

The best way to collect payments from clients and customers will be whatever is easiest for them. The easier it is for the client or customer to pay, the easier it'll be to get you paid. If you can, offer a variety of payment options from an online system that accepts debit and credit cards to invoices to cash to checks to bank wires. Consider asking the client what would be best for them.

How do you collect digital payments from customers?

To collect digital payments from customers, you may want to use services like PayPal or Venmo. You can also set up an online bill pay portal through companies like Bill.com who can help make it easy. For digital point-of-sale payments, you can work with brands like Square.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Experian. "How To Run a Credit Check on Your Customer."

  2. CalMiner. "The State of Debt Collection 2020: Industry Statistics, Trends, Collection Practices, and More."

  3. Bureau of the Fiscal Service. "eCommerce Collections - Digital Initiatives."

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