Do you feel as though you are constantly having to chase customers? Maybe you just want to put an end to late invoicing but don’t know how to be firmer with your clients. Either way, if you want to make a positive change then this guide will tell you everything you need to know.
Be Proactive
The first thing you need to do is be proactive about your customers and clients. Even if you are just one person, you should have fixed policies and processes for anyone who pays you late. Remember that prevention is always better than cure. Ask all of your clients to sign the terms and conditions you have, and detail what happens if someone does pay late. You may be able to charge them interest, or you may have means to take them to court if things get severe. Having a clearly defined process will help you to get paid on time, and it will also reduce the possibility of things getting worse for you in the future.
Contact the Client
The day the payment is overdue, you need to contact the client. The best way to do this is over the phone, because if you do it over email then you may be ignored. Do what you can to keep the conversation friendly, as you never know, there may be a perfectly valid reason why the invoice has not been paid. It may be that they are having personal difficulties or that they are having a hard time getting organized right now. It’s important to be both professional and courteous at this stage, because if you pursue aggressively then you may end up causing lasting damage to your relationship.
Be Persistent
If you do not get your money after you have chased the client, and if you have sent them email reminders then now is the time to be firmer. Press them for payment and withdraw your services to the client if the invoice is substantial. This can put pressure on them to settle quickly. Remember that late invoices can easily turn into bad debt, and if you’re not careful, it could result in your own business experiencing financial difficulties as a result. If this doesn’t work then now could be the time for you to hire credit collections services.
Take Legal Action
Nobody likes to pursue legal action. Sometimes though, patience is not the answer. If you have given your customer a service then you are well within your right to get paid for that. Depending on how large your debt is, you may want to speak with your lawyer, as they can advise you on what course of action you should be taking. It may be that you decide to write a formal letter regarding the claim, as sometimes this is enough to get your client to pay in full. If they cannot pay in full then you at least may be able to bring them to the table to agree to some form of settlement, so be mindful of that if you can.
