10 Fool-Proof Strategies to Avoid Late Payments From Your Clients

10 Fool-Proof Strategies to Avoid Late Payments From Your Clients

Late payments can be a big headache for any business owner, especially when you are starting as a small business owner or a freelancer. A survey shows that around 50% of business owners give up on their business in a year or two because of the late payments affecting their cash flow.

But nobody wants their business reputation to go down and tarnish especially when you are starting. That is why we have curated 10 foolproof strategies that can help you avoid late payments from your clients. A late payment can be one of the most detrimental issues an entrepreneur can face, especially if they rely on that cash flow to keep the business going.

Here are 10 effective strategies for preventing late payments from clients

1. Talk About The Payment Terms From The Very Beginning

A general rule of thumb that everyone should follow while starting as a business owner or a freelancer is to charge at least 50% advance before starting the work. It is best to establish guidelines for setting up clear payment expectations with clients. For example, if you are a product-based business and you are selling a product on a subscription, you should charge the customer before the first shipment of the product. That way, you wouldn’t have to experience any scam or return of the shipment beforehand.

Using e-invoicing software like Invoice Temple can easily automate your invoices based on the subscriptions and offers you provide to your customers. makes it easy to streamline your billing and handle your cash flow more efficiently. Invoice Temple can send timely reminders if you or the client forgets about the payment!

This way, you can maintain the cash flow while keeping your business running!

2. Follow Up Consistently

Following up on every client is a vital step to receiving payments on time. While you can choose several ways to follow up such as through mail, call or text message in WhatsApp or slack, keep in mind that you are just following up and reminding them about the payment. You should never be pushy with the client about payment but give them a gentle reminder about the payment. For example, if a client agrees to pay in a week or so, you can follow them up in 3 days to check in with them and ensure that everything is going according to the plan.

One way to avoid overdue payments is by keeping in touch with your clients throughout step of the work. Keeping them posted about the work will help them figure out when the work will be completed and when they should pay. Thus they can make arrangements for the money to be paid on time without getting surprised or overwhelmed about the payment.

3. Send Out Timely Reminders

Reminders can be one of the easy ways to keep track of your invoices. What’s easier is to automate the reminders through an online invoice generator like Invoice Temple.

Enter the details into the Invoice Temple software once and send out reminders as many times as you want. But remember NEVER BE PUSHY! You can also send them reminders through emails, texts, or by giving them a call.

Although if you haven’t received the payment on time even after sending out timely reminders, you can always take legal actions if necessary provided you have all the agreements and invoices documented safely.

Our stand is to use invoice-making software like Invoice Temple as it can save you a lot of money, time, and labor! Since Invoice Temple is a cloud-based invoicing software, all your data is end-to-end encrypted and safe with you always!

4. Consistency is the Key

Sometimes it's neither your fault nor the client’s fault for late payments. You must be busy with other work we do & distracted to send or receive payments on time. The best strategy here is to stay consistent and send out timely reminders and regular follow-ups!

5. Reward Your Clients For Early Payments

Who doesn’t love rewards? Whenever your client pays on time, offer them a simple reward like providing them with a freebie or a discount for early payment. It’s a win-win for you and your client as they get a reward and you get your payment on time!

Some examples of the rewards would be offering a freebie along with the goods they purchase, providing them with a free resource such as an ebook to guide them further in their business journey, or a 5% discount if they pay within 24 hours after sending out an invoice.

6. Impose Penalty Fees

If you think your client is not taking the payment or your business seriously, you can always impose a penalty fee if the payment is delayed beyond the due date. It is completely okay to impose a penalty because you have spent hours and hours working on the client's needs and building your business. You never want everything to go in vain, do you? So never hesitate to impose a penalty when someone delays the payment over the due date.

But make sure that you have mentioned earlier about the penalty fees in the agreement or while sending out your sales invoice beforehand. That way, no matter what the client can’t deny the penalty fees and has to pay them along with the due amount.

7. Stay Organized

Being organized can save you from a lot of mess in the future. Treat your business like a business. Never mess it up with other personal items. Make sure you follow a system for sending out invoices and receiving invoices and make sure it’s an easy system to follow. Do not complicate it as you may be finding it hard to follow the system you created.

That's when online invoicing software comes in handy. It does most of the job for you! All you have to do is enter the required elements, and the software can send out invoices, follow up and set up timely reminders for your clients to pay. it’s due on time and you’re proactively following up with customers if they are late.

Being organized doesn't only make the job easier for you, but also increases the transparency and trust between you and your clients. You can also keep a track of the money that’s coming in, going out, and the money that’s yet to come.

8. Offer Different Payment Mediums

The easier you make it for your customer, the more likely that you get paid on time!

When you are receiving payments, do not just think about the easier way for you to receive payment but also the easiest way for your client to send payments on time. Being considerate of your client and providing them with multiple payment gateway options in the invoice via a “click to pay button” or invoicing software like Invoice Temple makes it so easy for them to make the payment on time. The client can choose from a lot of different options like a credit card, debit card, or UPI to make the payment.

Also, when a situation arises when the only payment that you provide is not functioning properly, your payment gets delayed. And you don’t want that to happen, do you?  Offering different mediums for payment so that even if one is not working, there is another way for the client to complete the transaction smoothly.

9. Be Courteous

No matter what the situation may be, never be unprofessional or uncourteous to your clients. Maintain a professional stand always with your clients even if your payment is delayed way long after the due date.

If your client is not paying on time, one genuine reason for that would be simply that they don’t have the money to pay you now. Be understanding. Give them enough time to sort it out themselves if you find their reason for delayed payment is genuine. They must have some cash flow problem happening in their business just like you. No matter what’s going on in their life, it’s likely that you won’t be able to change it by getting angry with them. Be polite and understanding, and stay positive as you work through these challenges.

By being polite and understanding with your clients, you establish a good image with them thereby building long-term relationships.

10. Make It Easier Through Installments

Customers are more likely to pay an invoice on time if they have enough options. For example, you could offer payment through installments if they can’t pay you the whole amount at once.

This can help in two ways. First, it allows the cash o flow throughout as you work on the project. Second, it makes it easier for your clients to pay in small amounts rather than paying a large sum all at once.


In business, there’s no smooth road to take up. You’ll come across difficult clients in your journey. The key to handling them is knowing how exactly to handle them with patience. What’s yours will always find its way to you!