4 Tips For Chasing Late Payments – Without Annoying Your Customers!

Chasing payment is always a challenge. No matter what you do and what systems you put in place, it seems like there will always be that one customer who pays late, putting you in the difficult position of having to chase them for money. But for many business owners, this is a challenge they aren’t sure how to handle. It’s an awkward conversation, and always has the risk of permanently damaging the relationship you have with that client, particularly if the client is a serial late payer, or owes a substantial sum. So how do you get the money you’re owed and keep your clients happy? We have a few tips to share with you.

Automate Reminders

One of the ways many business owners avoid losing face or offending their customers is to automate late payment reminders. Many kinds of accounting software offer this functionality, and it basically means that all payment chasing reminders are sent by an automated system. This has 2 advantages – the first is that neither you or the customer loses face, since the reminders are being issued by a computer, and not by you. The second is that you will never be late reminding them of the overdue payment, which leaves you in much better standing.

Set Expectations Up Front

The easiest thing you can do to ease the collections process is to make sure you set expectations in the negotiation process. Before you’ve even won the business, make sure your customer knows what your costs are, what your payment terms are and the process that happens if an invoice is overdue. This provides them with all the information they need to pay you on time, and if they are late you can refer back to this discussion. If you have persistent late payments, you could also consider offering an early payment discount.

Use A Dedicated Email

This may sound silly, but if you’re worried about preserving your relationship with clients through the debt collection process, consider setting up a dedicated email for this purpose. An ‘accounts@examplecompany.com’ email can be anonymous, or you can create a name to go with it, but it essentially separates out you from the process. Use this email to send out invoice reminders and follow-ups, and you may well see some great results. It’s not the most forthright method ever, but we’ve seen it work numerous times in preserving relationships and encouraging payments.

Timing Is Everything

It might feel like there is never a ‘right’ time to chase for payment, but we can assure you there is. There are also a whole host of ‘wrong times’! For example, last thing on a Friday afternoon is always a bad time to send reminders. Instead, find out when your clients do their payment runs. Many do them once a week on a Friday, but this can be variable. Whenever it is, schedule your reminders for just before the payment run, so you aren’t missed off. And make sure you know who’s responsible for payments so your messages don’t get delayed.

Above all, you want to be nice to your customers during this process, but firm as well. Let them know that your interest is in claiming the money they owe, but you are willing to help and work with them if they’re struggling. If you would like to know more about the chasing payment process, you can download our helpful guide here.

At Debtcol, we work with businesses who are struggling with late payments or bad debts and to recover the money they are owed. Our team are experienced in all aspects of the debt recovery process, including both payment chasing and the legal follow through procedures that may be necessary. For more information on how to prevent late payments, or to find out how we can help you recover your hard earned money, get in touch with the team today