I just read a great post from the WSJ's online blog titled ‘What to do about slow payers.” - not sure if I should put a link here - not sure if it is allowed - and I don't want to promote them.
But, it was a good blog on how many small businesses are trying to collect from slow paying customers while at the same time not losing them as future customers.
Some tips they provided were:
“–Use a Personal Touch. One Houston company’s chief executive spent his time personally calling customers who were 30 days past due and patiently explained his dire situation. It worked.
–Withhold Service if They Don’t Pay Up. Emergency calls to the service department of a New Jersey heating and air-conditioning company get rerouted to an accounts-receivable clerk, who tells them to pay up or the technician won’t show up.
–Be Proactive in Collecting Money. Email invoices instead of mailing them. Call customers within a day or two of a late payment. Build several contacts within a customer’s company. Let customers pay by credit card or wire transfer.
–Negotiate new payment terms. If you see some customers who could agree to paying bills early, cut them a deal on service or a discount on products. And if they’re slow payers, put them on a payment plan that ensures that you still get paid in the long run, rather than getting nothing.”
I really like the last one. Providing incentives to not only get paid but to speed up your cash flow. Find out what is it worth to your company to be paid early and offer that as a discount.
However, this also has to be mitigated with your current time and expense. Some customers are just not worth it. That old 80/20 rule. These are the ones to strong arm and not deal with again.
As was asked in this blog, what are some of you doing to speed up collections without coming across as a jerk?
Bookmarks