Youve done your part. The job is complete, your customer is satisfied but a month has gone by, and your invoice is still outstanding. Youd like to work with the customer in the future. So how do you get your money without losing the customer?
Here are two strategies that may help.
1. Communicate promptly. On the day after the due date, send an e-mail with your original invoice attached, or fax a copy. Then call to make sure the duplicate was received. While youre talking, ask whether the customer has all necessary documentation, and find out why payment is delayed. If the customer is happy with your performance, mention that you wont be able to complete new contracts until past invoices are cleared up. Request payment on a specific date.
What if that date arrives but the money doesnt? Drop by your customers business. Take a copy of the invoice and notes of previous conversations. Offer to wait while a check is processed.
2. Be willing to negotiate. When customers fall on hard times, you may still be able to find a solution that will work for both of you. Some options:
* Ask for a portion of the outstanding balance.
* Request that a specific invoice be paid immediately, with the remainder due at staggered intervals.
* Establish a short-term payment schedule for a series of smaller checks.
* Offer to convert the receivable into a formal note, with an amortization schedule and interest rate.
Setting credit terms, limiting the amount of credit youll extend, checking ratings, Payroll Services, and requiring down payments can prevent collection difficulties. If youd like help establishing procedures for receivables management in your business, give us a call.
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