You’ve been working hard to establish a good reputation for your business, and you don’t want to risk losing that. You also need the money.
When customers start making excuses about why they can’t pay their bills on time, it feels like a slap in the face, especially if they have the cash to make a payment.
Unique Tips for Collecting Late Payments Appropriately
Delay your reaction
It’s easy to get angry and want to deliver a stern lecture or otherwise react unfavorably. Take a deep breath and consider if there’s any merit in the excuse being given before reacting. If you do need to have a corrective conversation, though, prepare for it by writing down what you’ll say and having the conversation at a time when both of you are calm.
Keeping your cool
When money is involved in an issue with a customer, emotions tend to run high. In order to stay calm and rational when discussing late payment issues with customers, make sure you have several reasons for why you’re pursuing the payment in writing.
See if there are any facts you can back up with written evidence, such as specific dates and times of missed payments or proof that the invoice was sent to them on time. That way, when a customer gets emotional on the phone, your documentation will be there if you need it.
Offer early payment incentives
Get ahead of late payments by offering early payment incentives. A common tactic is to offer a percentage discount on any invoices paid within 10 days of the invoice date, as long as they’re paid in full.
This solution will encourage customers to pay early, which rewards you with earlier payment and them with a lower bill. Plus, when you decide on your payment terms at the beginning of your business relationship with a customer, you can put incentives right in the contract.
Using software to handle invoicing and payment collection
It’s easier for your business to get paid. Zenbusiness.com recommends payment processing software to make it as easy as possible to accept diverse payment options from your customers which increases the likelihood you’ll get paid promptly.
By streamlining the process, you’ll be able to collect on late payments without compromising customer relationships or putting undue pressure on yourself. Here are a few of the top payment collection software:
It also helps to have a dedicated resource to handle the accounting and financial aspects of your business.
Why it’s important for your business to get paid promptly
When a balance is past-due, your business needs to use its resources to collect the payment. There are many ways invoices can be handled internally, each with its own costs in time and productivity.
The more time it takes for your business to get paid by customers, the fewer resources you have available to manage other aspects of day-to-day business, such as attending to customers or expanding operations.
With payment processing software, your business can accept diverse forms of payments from customers and receive notifications when payments are made on invoices you’ve sent out.
This will streamline the process and help you collect late payments without compromising customer relationships.
When it comes to collecting late payments, your goal should be a balance of keeping customer relationships intact while securing the payment.
With invoicing and payment collection software, you can streamline the process and increase the likelihood that you’ll get paid promptly for any invoice with as little hassle as possible.
Hopefully, this article gives you some confidence and information related to collecting late payments smoothly.