Suggestions for Avoiding Delinquent PaymentEditor
It happens to most business owners at one time or another… you’ve provided a service and are eagerly awaiting payment. Unfortunately, your client isn’t as punctual as you were in delivering their goods or services. You may be doing everything right in your approach to collecting. However, there may be something in the suggestions below to help you in getting payments in a timelier fashion.
- Be clear on your due date. Setting a due date instead of “pay within 30 days of receipt” will give a definitive time-frame and alleviate the excuse that they got the invoice later than they did.
- Charge a late fee. When there are consequences, people generally move with urgency.
- Offering an incentive, like a discount on their next service or product may entice them to pay early. For instance, if they pay up to a week early or if they pay on time for 6 months in a row, offer them a reward.
- Be sure your payment options are simplified. Do you offer an online pay option? Is an envelope, with the address on the envelope, included with the invoice for the payee to use? Do you accept various methods of payment? The key is to make it as easy as possible for your customers to make their payments.
- Hard times fall on us all at one time or another. Consider providing a payment plan. Getting a little at a time is a better alternative to not getting paid at for customers you have that may have hit a bump in the road.
- All of us are busy and sometimes things fall by the wayside. Some of those “things” might be your bill! Having a reminder that automatically goes out within a week of a due payment may welcomed by your client. Include where payment should be send and the total of the payment in case they did misplace their invoice.
- Set clear expectations when service is provided. Tell them at point of sale how invoicing works, when payment is due, and methods of payment you take. Also, let them know about late fees, if applicable.
- If you end up with someone that is not making payment a priority, cease future services or sales until they are paid. Particularly if they are repeat offenders.
- Build a good relationship with your customers. This is good practice anyway, but it can make a big difference in you getting paid. It becomes more personal to them and they think twice about damaging that relationship. They don’t want to burn a bridge with someone they genuinely like.
- Some people will ask for exceptions and there is nothing wrong with that occasionally. Be sure you limit allowances though. Unfortunately, there are folks that take advantage of one’s good nature.
In these cases, it’s imperative to be stern. It is equally important to be polite. That can be a challenge sometimes, I know. However, you don’t want to burn a bridge. Future business, referrals, and reviews come from good business… and bad. Always try to be on the good side of those you do business with; good, bad, or indifferent.