Ways to get your customers to pay on time
Keeping your revenue flowing can seem like a constant battle, particularly if your customers regularly delay settling their outstanding invoices. No matter how clear you are in your business terms, it’s common to have missed deadlines and even debts that appear on your books for months afterwards too!
If you’re determined to keep your cash flow healthy, how can you improve the chances of customers paying on time?
Manage customer expectations
There are times when customers are slow in settling their bills due to genuine misunderstanding, forgetfulness or a failure to fully appreciate the validity of the deadline set.
Either way, getting more customers to settle debts on time can hinge on your earliest discussions with them. There can be no room for ambiguity. Customers need to know upfront, exactly how payments are structured, including clear deadlines.
Firm up the deal
It’s worth putting in checks and measures to make sure your customers do fully understand and appreciate your terms, including the necessity for payment dates. Having them read contractual obligations and sign them, in front of someone else, can focus their attention on paying on time.
Be persistent and polite
Late payments are frustrating, especially if you’ve carefully followed the above steps! However, it’s strongly recommended that you keep a cool head. Go systematically through clear steps to contact the late payer by various communication channels (including a friendly reminder just prior to their payment deadline).
Immediately after the date, you may want to invite them to contact you to discuss reasons for the delay. If their late payment has a valid cause, it’s a chance to offer measures such as staged payments over a longer period. Having some cash on time can be better than nothing!
Professional help to avoid late payers
For many companies, the best way to ensure customers hit their payment deadlines is to outsource credit management and engage the services of a debt collection agency. The fees involved in debt recovery services should be balanced against the outstanding amounts, but also your time and stress levels in tackling late payers!
Handing the whole process over to efficient and effective professionals can help focus customer attention on the issue, increasing the likelihood they’ll see settling your invoice as a priority.