Getting Paid Before It’s Too Late
In good economies and bad, many companies have difficulty collecting on Accounts Receivables. From “slow pay” to “no pay,” you may be having a hard time collecting the money that’s due to you. But what can you do to improve the situation?
Recognize the Problem
The first step is to keep a close eye on your receivables, and take notice of any signs of potential problems. Common “red flags” include:
- Loss of Contact – They’re never in, don’t return calls, or don’t answer their phones.
- Broken Promises – After the second broken promise to pay, it’s time to take action.
- Change in Payment Pattern – A customer that used to pay in 30 days now pays in 90 days or not at all.
- Stalling – Keep in mind that genuine complaints are usually prompt and detailed.
- Bounced Checks – Never a good sign.
Once you recognize the problem it’s time to do something about it. Focus on your company’s cash flow, not the customer’s debt.
- Avoid Making Unrealistic Demands – Insisting that you “want it all now” may make the customer avoid you. If they had the cash, they would have paid the invoice!
- Suggest Monthly Payments – Ask how much they can commit to paying. If possible, get the payback schedule in writing.
- Offer Credit Card or PayPal Payments– You can obtain credit card processing services for a low set up fee and a percent of the transaction. Or you can offer to take payment via PayPal, and let PayPal accept the credit card. It may be worth the transaction fee to receive payment on a delinquent invoice.
Always remember, even when things are looking bleak, it never pays to alienate your customers. Acknowledge that they’re having a hard time and try to work out a win/win solution for everyone. If you do it keeps open the possibility that the customer will come back in better times.