Control Cash Flow

Get Your Customers to Pay Faster

Get Your Customers to Pay Faster

When Donnie Cooper first started his business in 2008, he went out of his way to avoid doing anything that might upset his clients. Afraid to rock the boat when it came to collecting payments, he decided the best approach was to simply wait for clients to pay. As a result, he had at least $10,000 in outstanding receivables at all times.

“I always thought, ‘They’ll pay me eventually. If I push them, they might fire me,’” says Cooper, founder of Inboundable, a Panama City, Fla.-based consultancy that teaches search engine optimization (SEO) to small business owners. “It turns out I was the cause of the problem because I set the expectation that I wasn’t important. That’s a terrible way to run a business.”

Cooper isn’t alone. 64 percent of small businesses receive payments late, and the average small business has almost $84,000 in unpaid invoices.1 Plus, of the small business that fail across the United States, 82 percent ultimately do so due to poor management of cash flow.2

Indeed, every dollar you earn is a dollar you can use to strengthen your business. Consider these four tips for getting your customers to pay you in full and on time.

1. Offer a discount to customers who pay early.

“The early payment discount is one of the oldest tools in terms of collecting receivables faster,” says Manny Skevofilax, principal at PORTAL CFO Consulting, a Baltimore-based firm that provides outsourced CFO services to small businesses. “In fact, some large corporations have a policy that if a discount is offered, they’re required to take it.” However, Skevofilax acknowledges that if your gross profit margin is thin, discounting might not be a realistic option.

2. Consider requiring prepayment for services.

Today, Cooper won’t start a project until he receives payment up front and in full. If that sounds too extreme for your business, requiring a deposit is another option.

“In project work, try to get 50 percent down,” Skevofilax advises. “If you collect another 30 percent after a significant milestone occurs in the project, with the remaining 20 percent due after you’ve completed the project, you’ll have collected 80 percent of your money while you’re still doing the work.”

3. Update your collection processes.

If you want clients to pay faster, then condition them to do so, says Skevofilax, who recommends establishing a deliberate invoicing and collections procedure and sticking to it.

“For example, a lot of people have switched to email invoicing,” he says. “It’s more cost-effective and less time-consuming, but there’s a chance your email could get caught in a spam filter or not get read because somebody was too busy. So, you have to establish a procedure. For example, we will email invoices on the first of the month and then place a follow-up call on day five or day seven.”

4. Optimize your invoice 

An invoice can be a powerful tool. In addition to basic information—including a strict payment deadline—every invoice should include your company’s collection policies. Make sure you’ve spelled out clearly that customers are responsible for fees or may be subject to credit reporting.

If a client’s payments continue to trickle instead of flow, the best solution might be walking away altogether.

“If you have somebody who constantly slow-pays you, you have to ask yourself whether or not it’s worth having that business,” Skevofilax says.

Get paid on time

Learn more about how you can help manage customer and supplier payments to keep your business operating smoothly.

“The Waiting Game: Small Businesses Suffering From Late Payments,” Nov. 19, 2015, Fundbox

2 “U.S. Small Businesses Owed $825 Billion in Unpaid Invoices,” Nov. 20, 2016, Entrepreneur

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.


Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.