Ensuring your regular clients are paying what they should, when they should can be challenging. Unfortunately, it’s not challenging in a fun ‘it’ll make you stronger’ way, it’s an endless pain and a serious waste of resources for any business, whatever shape or size. It took us nearly four years of social media-ing really hard for people before we found a simple, effective and value-for-money solution to the pain, misery and anguish being caused by wonderful but slightly disorganised clients. If you’re anything like we used to be, read on!
As a social media agency, like any service-based business with clients on retainers, we had those clients who paid on time, every time. When you’re billing by the hour and you have staff and other outgoings to pay, these are your favourite clients – even better if you can get them to pay at the start of the month rather than the end! So how good would it be if every single client did this?
Because let’s be honest:
Some clients don’t pay on time. Sometimes they pay the wrong amount. Sometimes they have two invoices outstanding and you’re not even sure which one to chase first. Awkward. What if you’ve got a meeting with them about next month’s targets and they still owe you for the previous two months? What if you think they’re going to end the contract and avoid paying the last two invoices? Awkwarder. Awkwarder, bad for business, bad for cash flow and you might need to escalate the issues – not what you want to be doing and not what you need at the back of your mind over the weekend.
It was probably the second time we’d been left out of pocket with clients that we really started looking for solutions to the payment issue. It’s one thing trying to grow a business but when you’re not sure which clients are going to pay on time this month, it adds a whole new level of uncertainty and risk to the equation. We even had our business development person spending time on the phone chasing payments – something had to change. And this is where things got interesting.
We were already using a nifty bit of accounting kit. You’ve probably already heard of Xero. It was keeping track of our payment situation and helped automate invoicing and chasing. It’s a great bit of accountancy software. Our issue wasn’t managing our accounts, it was simply having something in place to get clients paying on time. That’s when a close techy friedn told me about Directli. Before this all starts sounding like a dodgy TV advert, this is all true. There are pics on Facebook so it must be true. Let me explain what Directli actually does:
Directli not only automates invoices, it automates payments. That’s right – automated PAYMENTS. From your clients to you. When you set them to come in. Amazeballs.
Yep, it’s kind of like a direct debit but it’s all in an easy to access, easy to monitor accounting system. Your clients grant you access to take money out of their account (you set a limit between you) and they receive an email a week (or whenever you set) before the money comes out. This gives them enough tim to put the funds in their account if they need to.
Payment is completely automatic – you don’t need to do anything, they don’t need to do anything. If they cancel a payment, you’ll receive a notification and you can stop work on their contract until you know what’s up (this is a major unwritten bonus – you know if and when a client is not intending to pay so you can follow it up, although this has never happened to us).
Now, if you’re a rational business-owning human being, you’ll have a very clear and burning question to ask. “How the hell do you get clients to sign up to Directli?”
How to get clients signed up to Directli: 5 tips
1. You know those amazing clients you have that always pay in time? Sign them up first. Given that they always pay on time anyway, this shouldn’t be a problem. “It’s a new system we’re using and we’re putting all of our clients on it – it’s really cool” and this is the key bit:
2. “It will save you time paying invoices individually and we won’t have to waste your time chasing payments”. There are benefits to both you and your clients! This is key, especially when you’re signing up your less timely paying clients. The later they pay, the more you have to chase them, the more of THEIR time is wasted – it works for everyone.
Granted, some of your clients will take time to come round to this, it’s possible some won’t, but make sure they’re in the minority. Here’s something you can try with the trickier ones:
3. Recommend they use Directli themselves! It’s so good, you’re already telling them to use it. As soon as they start looking into Directli and maybe using it themselves, they’ll can’t help but sign up to yours.
4. Find out their objections to Directli (this goes for existing and new clients). Think about it. If their excuses are “err, well, cash flow… we can’t just have money going out… blah blah” they’re basically saying “we’re going to pay late some months”. This is not what you want to hear and should be raising some alarm bells. By actually asking people to explain their objections, they might actually realise how much sense it makes for them to use Directli.
5. Make it your terms of trade. This sounds incredibly bold, but it works. Saying “we don’t work with clients who don’t sign up to Directli” is a powerful statement. It shows you’re not afraid to turn work down and how important it is to you that they sign up. It also creates a clear indication of a troublesome client if they say, “no, sorry, we won’t do that”. Ask yourself “why not?” Why aren’t they conforming to this simple request? Remember, all you’re doing is asking for them to pay on time! You can now make a decision on whether or not this potential client is really worth your bother (bearing in mind you’re probably going be chasing payments forever).
What’s the bottom line?
Directli has revolutionised the way JC Social Media does business. No, not every single one of our clients is on Directli, but the vast majority are. Of course, some of your clients won’t agree to it – the big blue chips may well have strict payment terms, but you’ll still get a lot of clients paying you on time, automatically. The fees are incredibly low once you consider how much time and hassle it saves you or one of your team members (and the stress!) – like, seriously low.
It’s probably too cheap, actually. But they should definitely not charge more.
When anyone talks to me about late payments and the associated stress, I always mention Directli. Their customer support is also very good – it’s important this is in place and they’ve never failed to sort out the problems we’ve had (only one or two).
Genuinely and honestly, I highly recommend businesses taking a long look at Directli and see how it could benefit you. We’ve not looked back since and, yes, it is a condition of trade.