16 December 2020

There are a few things you can do to collect payments as scheduled

Whatever your business size, collecting payments can be a source of stress. Slow paying customers can cause particular problems especially if you don’t have a steady cash flow. On top of the money difficulty, you would also need to stress over multiple invoices, endless email threads and extra phone calls.

The frustration also comes from the fact that you’re walking on eggshells, because you are working with people who could be valuable, long-term customers and the last thing you want to do is to sully business relationships.

Not paying on time is a behavioural problem on the part of the customers, and that means you can address it by changing a few behaviours on your end.

Tighten up your reminders and follow-up protocols

Your customers should already know what their cost and payment schedules look like. It should be crystal clear with no room for confusion or an excuse not to pay on time. If you failed to do that from the onset, your only chance is to be more resolute in reminding and following up.

Start by putting in place regular gentle reminders to ensure, with absolute certainty, that they are aware of how much they will owe and when they will owe it. Make sure they respond to your reminders to avoid giving them the impression that they can get your products or services without them having to pay on time. That’s a precedent that’s difficult to change.

Once you’ve sent the invoice, never hesitate to follow up. Always assume that they’re busy and they might overlook it. Put it in your calendar. A gentle follow-up demonstrates your capacity to act professionally, and it tests their ability to do the same.

Make them feel good for paying early

Your customers know they are going to have to pay at some point. However, letting them know that paying before the due date will give them an additional benefit will most likely prompt them to make early payments regularly.

Offering incentives will not only speed up the process but also builds customer loyalty and makes the business relationship delightful.

A good trick is to build these incentives around your own product or services. It could be as simple as sending company merchandise or giving premium access to an additional feature. Or maybe offering a week of free service. Know your customers better so you can come up with sweeteners that they would love and make them feel rewarded for doing their part.

Try to be as personal as you can with your customers

Speaking of getting to know your customers better, it will give you a much easier path to payment collection if you’ve already established a certain degree of affinity and rapport. This may require a bit of extra bandwidth on your part, and we know that some people are not comfortable making friends with some of their customers, but doing this will help you feel more comfortable asking them in the case that they have not paid. Sending a quick reminder to someone that you know is easier, compared to following up with someone and feeling like you have to be more formal. Of course, you should not allow that new personal connection make the problem worse by letting them assume they can miss payments because you are friends with each other.

Conduct little experiments

If you want to collect payments faster, there are a variety of small factors that you can look at. Think back on the last time they were able to send their payments on time. What time of day did you send the invoices out? What was the content of the message? What else is unique about that transaction?

Maybe you need a cleaner, clearer invoice? Maybe you’re sending it to the wrong people? Or maybe someone else needs to send it? Maybe the due date is ill-timed? The devil is in the details, so sometimes it’s those little things that could help improve the speed in which you receive their payments. There’s no harm in making a few tweaks, especially if the constant reminders and follow-ups don’t seem to work.

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