What motivates consumers to pay your invoice?

You may be a small business owner or a professional in the position of finance. You may be reading this and at the same time having challenges with cash flow. The main culprit could be late and non-paying consumers.

Just about every type of business will encounter this challenge, and it’s imperative to implement a regular and consistent program for getting customers to pay you for what you have provided. Whether it is late customers or those who refuse to pay, having a rock-solid accounts receivable program is non-negotiable.

It helps to understand what motivates customers to pay a bill, whether that’s their regular habits or their past-due bills.

Understanding this can help your accounts receivable program be healthier including that cash flow you seem challenged with.

So, what motivates consumers to pay their bills?

Paying bills on time is just how they were brought up

We know many businesses focus on the customers who have not paid, but if you think about it, most of your customers are paying you in a respectable amount of time. Many people pay their bills on time, and it’s just the way they manage their money. Maybe they learned it from their parents or they were taught good money skills elsewhere. Most people do, in fact, meet their financial obligations.

Consumers want to avoid late fees and penalties

Many consumers are motivated by the fear of incurring additional costs on their bills. For example, many consumers want to pay their utility bill on time to avoid those late fees and even a service interruption. And many offer a discount for paying early. Some small businesses, and you may be one of them may waive those late fees for a recurring customer. But many businesses do not.

Paying bills on time maintains a good relationship with your business

Much like your business wanting to create beneficial, long-term relationships with customers, the same holds true for them. Most consumers enjoy a healthy relationship with your business. They want to be treated right, and part of that is paying you on time. If you have treated your customers right and have provided them with a great customer experience, you’ll most often be rewarded with on-time payments.

Consumers want to protect their credit score

Having good credit means many things to consumers. One of the most important reasons is that it allows them to obtain additional credit such as a mortgage or an automobile loan with much more ease. Having a bad credit rating can get in the way of a consumer’s life decisions. Maybe they can’t get that mortgage. Maybe they’re paying a higher percentage for a new auto loan. Having a negative credit score can also impact a consumer’s credit line on credit cards. If a consumer knows that paying an invoice late could affect that credit score, it might just motivate them to pay your business on time.

Appreciation for a great customer experience

Consumers love having a great experience with your business. They also appreciate quality work and service. Your clients in many cases will happily pay your invoice on time because they experienced excellent results and service from your organization. As you know there were other factors involved in getting paid but the better the service can equal more timely payments.

Straightforward documentation and invoicing

If the documentation you provide your customers is clear and easily understandable, that makes it easier for a customer to pay. This also includes the way you invoice customers. Clear invoicing reduces confusion and even resistance sometimes. For example, a customer may pay quickly if an invoice clearly lists services, the rates and of course due dates.

Ease of payment options

If you make it easy for your customers to pay, you will see an increase in timely payments. You should provide several opportunities for a consumer to pay their invoice, including good old-fashioned paper checks, cash at your place of business, and credit cards. More and more businesses are also utilizing online portals for customers to pay. Consumers like being easy… so help them pay you on time.