Getting Your Customers To Pay

If there is one common complaint amongst businesses large and small, it is that a significant proportion of customers simply won’t pay on time. It’s a fact of business life, but one you will have to quickly minimise if you are to be a success.

Find out about your clients

Most business is good business, but the dictum falls down when the customer can’t pay. If possible, look into the people who are employing you before you enter into a contract. This is particularly important if the deal will represent a significant investment of your time or money. Search engines are advanced enough that it shouldn’t take long to find out if your client is notorious for not paying up.

Invoice promptly

Accountancy isn’t the most glamorous of business professions, and small businesses often leave it until last. Don’t make this mistake. Your customer is unlikely to pay unless you ask, so make sure you do. If you leave it too long, you will build up the impression that you either don’t care about the money, or that you are too disorganised to force payment.

Expand your payment options

Some people are used to paying their debts with one particular method, and anything that seems difficult or different goes straight to the bottom of their inbox. Why not investigate methods such as a Paypal account, as well as more traditional channels for payment?

Think about penalty clauses

You will need to take basic legal advice if you decide to go down this route, as legislation often excludes certain types of penalty clauses from taking effect. They can be worthwhile, however, as an incentive to clients to pay up, and as a reward for the work you have to put in to chase invoices. If you are concerned about the legality of your contract, you can always turn the clause around and offer a discount for early payment.

Chase payments consistently

If you are having no joy with a client, make sure you chase the payment regularly. The first couple of interactions should be firm but polite, but if they still aren’t paying you will need to make it clear that you will not let the matter drop. Envelops with phrases such as ‘urgent demand’, ‘final request’, and ‘possible legal action’ tend to catch the attention! Do everything you can not to go to court, though, as it is both stressful and potentially costly. Use it only as a last resort.

Try to be understanding

No one wants to be the bad guy, and sometimes customers have legitimate reasons for not paying on time. They might be in the middle of a cash flow crisis, or chasing customers of their own. Try to be reasonable, and don’t get a reputation for being unpleasant. Remember, repeat business is a significant sign of success, and one of the best ways to achieve it is to be the kind of person with whom people want to do business.

We can offer you financial solutions to help keep your cashflow healthy. Request a quote now to find out how much invoice finance can save you.

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