By Courtney Rosenfeld
In any sales-based business, you will inevitably encounter a customer who has not or will not. The way you handle this tricky situation can have an effect on your customer relations and even the long-term ethos of your business. You’ll need to show patience and smart thinking to ensure your late payments are managed productively. Local Marketing Center presents some tips for handling those late payments in a professional manner.
The best way to handle late payments, of course, is to avoid them altogether. If a client is clear on how much and when they have to pay, they’re more likely to pay on time. To convey this information clearly, you’ll need to properly format your invoices or even use a customizable template. A good invoice should look professional, include your company name/information, and mention the payment terms.
To avoid a situation where there are disagreements over the amount due (which will ultimately result in later payments), it’s important to track employee time efficiently. A time tracking calculator can make all the difference in this regard, especially when it integrates with payroll software. A calculator will allow you to quickly and accurately quantify employee work hours so that you won’t mismanage breaks or omit overtime pay. It will also mean that any time billed to the customer/client is digitally documented and clear to see.
To encourage your customers to pay on time, it sometimes helps to offer incentives. This is not just about offering rewards but also structuring your payments easily. You can do this by providing a number of methods to pay, making sure invoice line items are clear, and communicating regularly to ensure any questions are answered. Convenience can play a big part in the compliance and contentment of your customers.
It’s also possible to use incentives to improve customer loyalty. With the right rewards, your customers will not only want to pay on time but will actually want to pay you. Consider attaching early-bird discounts, providing events/connections (which in turn encourages good business etiquette), or even using coupons/vouchers. All of these ideas can help increase the chance of repeat interactions and, in the long term, improve sales.
In the occurrence that someone has outright failed to pay, you may need to take action and chase up. Deciding how long to wait before doing so can be a matter of legality — if there wasn’t an agreed due date, then the payment is late only 30 days after the customer receives the invoice or the goods/services are delivered. The first consideration is to be polite and friendly in your email — some customers may even appreciate the reminder.
If your customer still isn’t responding, it’s time to switch up the method of communication. If you want to start with a more light-hearted reminder, use an online flyer maker to put together a notice that’s nice but firm, as well as eye-catching. Phone calls, meanwhile, are harder to ignore than emails or flyers and can be useful for clarifying the situation. You may want to accompany your phone call with a warning email about late fees — it is fair to charge late fees but you should aim to notify the customer before they are incurred.
If all else fails, you may need to escalate the issue to a higher authority. It’s true — sometimes late payments can result in a visit to a small claims court. But by planning ahead and taking the steps above, you can make this outcome unlikely.