How to Collect Payment from Customers

To collect payment from a customer, set clear payment terms, issue professional invoices, and offer multiple payment methods such as ACH or credit cards. Sending reminders and following up on overdue invoices ensures steady cash flow while maintaining positive customer relationships.

Set Clear Payment Terms Upfront

Before providing goods or services, always define your payment expectations. Clear terms prevent confusion and disputes later.

Best practices:

• Specify payment due dates (e.g., Net 15, Net 30).
• Define accepted payment methods (ACH, credit cards, checks, etc.).
• Add penalties or late fees for overdue invoices.
• Offer discounts for early payments (e.g., “2% discount if paid within 10 days”).

Example: A contractor might state in their agreement: “Invoices are due within 15 days. A late fee of 1.5% will be applied to unpaid balances.”

Issue a Professional Invoice

Invoices should be clear, accurate, and sent promptly after the service or product delivery.

Details to include in every invoice:

• Business name, address, and contact details
• Customer information
• Invoice number and date
• Itemized list of products/services with rates and totals
• Payment terms and due date
• Payment instructions (bank details, payment portal, etc.)

Tip: Using accounting software like QuickBooks or integrations like DepositFix makes it easy to generate professional invoices automatically.

Provide Multiple Payment Options

Customers are more likely to pay faster when they can use their preferred payment method.

Common payment options:

• ACH transfers – low-cost, secure, best for recurring payments.
• Credit/debit cards – convenient, widely used, but with higher fees.
• Online payment portals – PayPal, Stripe, or integrated platforms.
• Checks – still used in some industries, though slower.

Example:

Send Payment Reminders

Even with clear terms, some customers need reminders.

Best practices for reminders:

• Send a polite reminder 3–5 days before the due date.
• Follow up the day after the due date if unpaid.
• Use automated reminder emails from your invoicing software.

Example message:
“Hi [Customer Name], this is a friendly reminder that invoice #1023 for $500 is due on [date]. You can pay online here: [link]. Thank you!”

Follow Up on Overdue Payments

If a payment becomes overdue, escalate gradually while staying professional.

Steps to handle overdue payments:

1. First week overdue: Send a polite reminder.
2. Two weeks overdue: Call the customer directly.
3. One month overdue: Send a formal collection letter.
4. Still unpaid: Consider working with a collection agency or writing off as bad debt.

Track and Record Payments

Recording payments ensures your books stay accurate and cash flow is properly managed.

Tracking methods:

• Use QuickBooks or similar software to automatically match payments with invoices.
• Record partial payments when customers pay in installments.
• Reconcile bank statements monthly to confirm all payments are captured.

Bonus: Collect Payments Easily with DepositFix

If you’re looking for a seamless way to collect payments, consider DepositFix. With DepositFix, you can:

• Accept ACH and credit card payments online.
• Automate invoice creation and payment tracking.
• Pass credit card fees to customers if desired.
• Improve cash flow with recurring billing options.

This makes collecting customer payments faster, more reliable, and less stressful.