Obtaining new clients is great for your business. Unless, of course, they fail to pay your invoices. Here are some tips for ensuring that you get the credit control process right and don’t run into worrying cashflow problems.
Many businesses forget to inform their credit controller of the issues/queries that arise. This is where communication is vital and it is essential that all procedures are followed. Breakdown in these areas will lead to the debts being written off or discounts being given due to failure to log all the facts. In some cases, clients may choose to take their business elsewhere.
What many companies fail to realize is that the process of avoiding the problems of late payment and bad debt begins as soon as an order is placed. Invoice quickly and accurately. A sale isn’t a sale until payment is received.
Day 1: Send an invoice immediately
Day 14: Make a courtesy call to check receipt of the invoice and to confirm when payment is due.
Maintain a positive relationship
Building a friendly and positive relationship with your clients has several advantages. Not only will it encourage them to purchase more services from your business, but it will also improve your chances of getting paid on time. The more they like you, the less likely it is that they’ll keep you waiting.
Always be polite and speak with respect.
Keep motivated and remain patient
Credit control can be a very difficult job and if payments are not being made, it is very easy to lose motivation. Don’t be afraid to make mistakes and keep going. You need excellent interpersonal skills whilst you’re communicating and negotiating with clients to ensure debts are paid in a timely manner. Resolving disputes and collecting payments can be a task on its own. Patience, persistence, and understanding go a long way.
It is essential to keep records of all your letters and emails, not only for your own reference but in case there is a payment/service dispute or if the issue ends up in court. Being organized and keeping records can be the difference between resolving a query/dispute or not.
Consider stop lists and be wary of payment excuses
Consider placing non-paying clients on a stop list and refuse any further services until the account is cleared. Don’t take your clients’ excuses at face value. More often than not, they’re a delaying tactic. Consider late payment charges. While some clients will take their business elsewhere, there is no point in having clients who do not pay.