Tip 1:
If the invoice is large, call the customer before the payment due date to make sure it has been received and there is no query - this is good customer service.
Tip 2:
Make immediate contact when payment has not arrived, be assertive about what you expect and when you expect it, and make the consequences of non-payment clear. Follow up promises to make sure they’re met.
Tip 3:
If a customer persistently pays you late or makes excuses, check them out and consider whether you’re prepared to continue supplying on credit terms.
It may be better to lose an order, or even the customer, than supply goods, not get paid and suffer a bad debt (when that happens you lose the goods and the money you’re due). At a net profit margin of five percent, to recover a bad debt of £10,000 will require additional sales of £200,000.
Tip 4:
Be polite, professional and persistent - do what you say you’re going to do when you said you were going to do it.
Tip 5:
Try to get customers to pay by electronic transfer or direct debit to avoid waiting for the cheque to arrive.
How can we help?
If you need help in chasing payment from your customers, please get in touch.
This video was reproduced with thanks to the Institute For Credit Management.