7 Tips To Collect Late Payments From Your Customers

 In Invoices

Do you always find it a battle to get some of you clients to pay up debts? That can be very frustrating, but the truth is that you are not alone. A lot other business owners like you suffer from the same fate. In fact some businesses have had to shut down because of debts. This post is not to scare you but to give you some tips that can help you. The following steps have been well researched, try them and see a turn around in how you get what you’re owed.

     1. Be Prepared Mentally

Most business decision you’ll make will be tied to your mental preparedness. Being committed to getting paid starts from the mind. You have to know that most late paying customers will tactically manufacture excuses that will play at your emotion, so you’ll have to take the personal decision to be friendly, yet firm and professional. If you fail to develop such mindset before approaching the collection process, they there’s a strong probability that you’ll get trampled upon by customers. If you think you’re too soft to negotiate properly, then you can select someone or even make it part of an employees job.

     2. Follow up

It has turned to a habit for most entrepreneurs to let customers get away with late payments. Business owners sometimes get too busy chasing other things that they even lose track of the people owing them. There are available accounting software that you can use to make an evaluation of your receivables from time to time. With such software, you’ll be able to keep track of debtors. Next is to plan a system that will help you go after debtors that are either 3 days, 5 days or 10 days late for payment – then stick to whatever system you develop.

     3. Send Reminder Letters For A Start

Like we mentioned earlier, your approach needs to be tactical and professional. You can actually start by sending out letters few days from when payment will be due. Letter will act as a polite reminder for them. Approach different cases in unique ways. The letter should politely but professionally address the specific case but make sure to add a call to action at the end of the letter, calling them to contact you to further discuss payment.

     4. Next, Put a Phone Call Across

Stay back and observe how effective your letter is. Give them a window period of payment. If after this window period they are yet to contact you with your pay, then it’s time to make a call. They’ll hardly ignore your calls and in most cases, you’ll get to know what problem is keeping them from paying.

     5. Don’t Show Your Anger To The Client

Here, you biggest goal is to know the problem and try to get the client to pay. Don’t go about threatening them or showing anger to them in any way. Know how valuable the client is and treat them with respect. It is good to be persistent, but you have to know how to go about it without hurting them.

     6. Take Legal Actions

If at this point, payment is still delayed, then you must have exhausted every peaceful steps. The next step is to call your lawyer. Let you lawyer serve them a demand letter, threatening with legal action if the client continues to owe. This will bring some scare to the defaulting client, forcing them to pay up.

     7. Hire a Collection Agency or Take Them To Court.

If after a demand letter has been dispatched, the client remains adamant, then the next step is to take them to court. Your lawyer should advise you how to go about it and whether it will worth the while. If you’re not interested in getting a court involved, you can hire a collection agency. A collection agency will go about the process professionally, taking the dept from you and handling it like it’s there’s. They’ll normally charge certain percentage of the debt, but that’s insignificant compared to what you’ll lose if the client doesn’t pay up.

Conclusion

Every late payment case should serve as a basis for you to learn and build new experience, so that in the long run, you know how best to del with possible cases that may come up in the future.

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