Five Sensible Tips for Collecting on Payments from Customers
PC Mag has compiled a list of five tips that help convince a customer they need to pay your bill and pay it now. Read more about 5 Tips for Collecting on Payments from Customers. The magazine’s suggestions can be summed up as:
(1) Have a Written Credit Policy.
A written policy educates the customer as to what you expect from them. It Lays out the ground rules for paying on credit and shapes their expectations. Without a written policy there can be a substantial amount of arguing back and forth about when something is supposed to be paid, how much time between the invoice and payment is reasonable, etc. think of a credit policy as a contract (which, actually, it is) between you and the customer laying out each obligation than they have and each responsibility you have.
(2) Invoice Quickly.
As soon as you ship the product, or as soon as you finish the work, send an invoice. Do not delay as this invites a delayed payment. A quick invoice also communicates to your customer that you are serious about getting payment.
(3) Tell the Customer About the Outstanding Balance When they Buy Again.
It is not unusual for a customer who is overdue to make additional purchases on their account in the mean time. PC mag suggests that every time they make a new purchase that you remind them about the outstanding balance. The majority of the time the customer will pay the entire amount due when confronted with a reminder of the past due amount.
(4) Send a Monthly Bill, Regardless of Activity on the Account.
Regardless of the customer’s purchasing activity for the month, send a bill. This will do two things. It will remind the customer that you are, in fact, keeping track of what they are doing, and it also reminds the customer about the overdue amount. The emphasis should always be about open and frequent communication. Accounts become delinquent because they are neglected. When a seller ignores the account, that is when they will run into trouble, That is when the customer will “forget” about the debt or over extend themselves and get in trouble.
(5) Send a Collection Letter Quickly.
You want to take action once a customer becomes overdue and immediately send a collection letter. Again, this emphasizes communication and getting the customer’s attention. You can’t let them forget about the amount owed and you must make it seem like this is a very important debt that you need repaid as soon as possible.
The article gives a good sketch, but just a sketch, about how your business should “lend” to you customers. Your best bet is, as always, to work with an experienced debt recovery firm, such as Stevens & Ricci, to help you design a complete accounts receivable program, that includes a debt collection plan.
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