MLR

How to collect payments without losing customers

Regardless of economic conditions, there will always be late-paying clients.

past due stamp

It’s important to collect in a timely manner so that your cash flow does not suffer.

How you deal with late-payers can affect your company’s reputation. Here are some tips for speeding payment without creating ill will:

  • Avoid the temptation to lump all late-payers into one category. Is the customer or client a chronic foot-dragger, or someone who has fallen on hard times and needs special consideration?
  • Develop a standard credit policy, including payment due date, the collection steps that will be taken if necessary and a notice of fees for late payment. Communicate this policy to your clients.
  • Ensure that you have correct contact information because a common reason for late payment is misdirected invoices.
  • Seek to resolve any differences quickly when the amount of the bill is in dispute. If the resolution involves a credit, post it immediately and let the client know it has been posted.
  • Confirm any promised payment amounts and dates immediately by email or letter so a reminder can be easily sent as the date approaches.
  • Contact the client as soon as you sense a problem. The issue may be one of timing. If so, offer a payment schedule revision.
  • Follow up. Otherwise, late-payers may feel that, once you’ve called, the heat is off and they can slide for a while.
  • Be persistent. Caller ID makes it easier to avoid you, so when you do reach the late-payers, make it count by setting a firm payment date.
  • Step up your efforts to the next level of your credit policy if payment still doesn’t arrive.