When you get paid, the sale is complete. When a customer doesn’t pay, they’re hanging on to money that is rightfully yours and you should ask for it. You should have a routine system for following up non-payment that includes letter, email, and telephone, but be prepared to act more quickly if the amount is large or you are concerned about the customer.
Can you answer yes to all of these questions?
- Did you agree the payment terms with the customer before you accepted their order?
- Are you sure the invoice is accurate and no dispute has been raised?
- Has the payment due date passed?
- Has the customer confirmed receipt of the invoice?
- Do you have proof of delivery for any goods delivered?
- Does the invoice say how and where payment should be made?
- Do you keep a record of all collection activity? It will be vital later if you have to engage a third party.
FIVE TOP TIPS
- 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.
- 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.
- 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).
- Be polite, professional and persistent; do what you say you’re going to do when you said you were going to do it.
- Try to get customers to pay by electronic transfer or Direct Debit to avoid waiting for the cheque to arrive.