WHEN THE CHECK’S NOT IN THE MAIL
By John Ingrisano on Dec 3, 2009 in business management
Who’d have thought that getting paid would be so tough? Well, welcome to the recession, often evidenced by customers who try to stretch their payments as far they can. What to do to collect on overdue bills? Try the following ten ideas:
1. Have a system in place to deal with delinquencies. Establish good collection practices. This means written policies and procedures that will be used as a guideline when dealing with collection problems.
2. Do not ignore overdue bills. The biggest mistake many business owners make it to wait until too much time has passed. The longer a bills goes unpaid, the more likely it will be uncollectable.
3. Rebill promptly, the very day the bill is due.
4. Pick up the phone and call within a day of rebilling. Ask for explanations and remind the customer that the bill needs to be paid immediately.
| All clients are not deadbeats. Explains Terri Hansen, business consultant and life coach with Hansen & Associates, LLC, Oshkosh, Wisconsin:
“If a customer is over thirty days past due, a gentle written reminder to pay the bill is often enough to call the person’s attention to the problem. Sometimes customers really do misplace or overlook a bill. If they don’t respond, then call and discuss it with them. This gives you an opportunity to problem solve and try to save the relationship.” |
5. Never apologize. This is money they owe you. Payment is not a favor. Listen and talk, but then be sure to ask the customer to write a check today for the full amount owed.
6. Be firm but friendly. You should be understanding, but they must be reasonable. So, avoid arguments. Besides, backing that person into a corner will rarely get you paid. Remember, your goal is to be at the top of the customer’s payment list, not the bottom.
7. Ask for the full amount. If the customer wanted a discount, that should have been discussed before the job started.
8. Negotiate terms, not amounts. If a customer owes $3,000, agree to monthly payments of $500, interest-free, provided the first check arrives in five days. Also stress that if a payment is missed or late, the remainder will immediately go to collections. No follow-up discussions.
9. Send a pre-collection letter. This should come from an attorney. This formal, third-party demand letter is often all that is required to obtain payment.
10. Start the collection process. Provide all information to the agency and let them handle it from there.
COLLECTION PROCESS
1. Send invoice. 2. At 15 or 30 days, send second invoice and… 3. Call and request payment. 4. On day 30 or 45, turn account over to attorney, who sends letter demanding payment within 10 days. 5. After 10 days, begin legal action.
Source: John Schuster, Young, Schuster and Maslowski, LLP, Oshkosh, Wisconsin. |
The bottom line: You work too hard for your money to let a client or customer simply not pay money you are owed. The above ten tips will help reduce the number of no-pay and slo-pay invoices. Good luck.
John Ingrisano
The Freestyle Entrepreneur
204 Lakeview Drive
Algoma, WI 54201
(920) 559-3722
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Free Internet Business | Dec 10, 2009 | Reply
You got a nice lists here.
All you’re saying are true!
Sometimes you need to be strict just to motivate others and yourself as well.
That’s I called Real Business!
Social Tool | Apr 13, 2010 | Reply
Thank you for these tips! In this day and age, money can be a little tight, for both consumers and business owners, so it’s a really tumultous period.