The business owners who collect their payment after delivering their services or products face various problems in collecting the payment. These kinds of business owners are familiar with the customer who make a delayed payment or does not make any kind of payment at all. Well, there could be various reasons for the delayed payment from the customers.
But, you should always encourage your customer to make payment before the deadline. Most new business owners struggle t find the right way to ask the customer for not paying at right time without being rude. The accounts receivable automation software can help you to ensure the proper cash flow in the business and collect the bills from the customers as soon as possible. Collecting payment from the customer at the right time plays the important role in the growth of your business.
Here, we have made a list of points that will help the business owners to handle the non-paying customers:
1. Discuss Related To Payments In Advance
Before making a deal, you should put everything on the table so that the clients do not create disputes later on. It is important to ensure that deal is crystal clear and there should be hidden terms. Thus, you should discuss payment with your client in advance. It is important to build trust for a strong relationship.
If you discuss timely payment with your customers in advance, it will increase the probability of getting timely payments. Making everything clear in advance will help in strengthening up your relationship with the clients and help to keep your clients to stay connected with you for a long time. It will ensure repeat business and growth of your company.
2. Upfront Payment
Another way to encourage your clients to make payment in advance is to ask them for upfront payment. You can collect a few percent of the total bill in advance so that only serious customers ready to receive your products or services. According to the survey, if you collect a few percent of the total bill as upfront money, it will increase the probability that you will get paid at the right time.
Thus, the upfront payment will help in increasing the cash flow. When you collect the due amount from the customer, then you can make further payment to supplies and pay wages to employees. By investing in the accounts payable software, you keep a record of the amount that you have to pay.
3. Check the Credit History of Clients
You should check the credit history of your customers. It is important to make sure that your new clients have a spotless track record. Never extend credit to any new customer who is having a bad credit score. By checking the credit score of new clients, you will have an idea of whether your new customers will make payment at right time or not.
Also, you should keep a record of those customers who always delay in paying the due amount. You should invest in the accounting software that will help in maintaining the precise records of your customers. The latest technology accounts receivable process automation software also helps in fetching the credit history of clients.
4. Immediately Send Invoices
If you delay in sending the invoices, it will give an excuse to your customers for delayed payment. The business owners have to handle so many tasks. Thus, it is quite easy to lose track and forget sending the invoices. Thus, you should invest in automatic accounting software that can easily manage various accounting operations.
This software will also invoice immediately and automatically so that your customers receive the invoices at the right time. It will automatically encourage the customers to make payment before the deadline. If you forget to send the invoice, you cannot blame your customer for the delayed payment. The accounts receivable management software will not just send the invoice, but also helps in sending the reminder message.
5. Stay In Touch With Late Paying Customers
If the late-paying customers do not reply to your emails, you should call them to take follow up. You should keep calling them until they make payment. You should always use polite language with customers whether you are writing an email or talking to them over a call. When you call your customers, you should emphasize that you want to settle the accounts and make a request to them for making payment as soon as possible.
You should use the latest technology accounts receivable collection tools to collect payment as soon as possible. You should mention to your customers that you will charge for late payments. It is recommended that you should set up a system and create clear terms & policies for your business.