Handling late payments
One of the challenges of running your business is ensuring that you have a steady cash flow and all of your business endeavors go as planned. However, problems can arise when client payments are left unsettled. This causes your business to hold any business plans as you do not have enough cash for the operation. There are some strategies you can use to ensure that late payers settle debts.
Create A Contract When Entering A Business Deal
A contract binds the business owner and the client into an agreement. In the event the agreement is not performed, both parties have the right to withdraw the contract. The contract says a lot about the agreement made including the scope of work, amount of work that the client should pay to the business owner. It also includes the date that the payment should be made. Since a contract is a legal document, any claim can be supported by this tangible evidence. As a result, the client will be forced to make a payment to prevent taking matters to the court. It can be difficult to chase late payers without a contract.
Choose An Efficient Tracking System
If you nave numerous clients, it is easy to lose track of payments that are already due. You need an organised approaches so you can minimise dealing with flawed financial statements. It is important to ensure that every purchase order has a number and other essential details. This way, you will be able to identify payments that are already due. There are many accounting programs and online applications you can use that will be able to help you track payments.
Send Reminders
One reason clients tend to forget paying on time is due to the jobs they have to juggle. Do not hesitate to send payment reminders by phone, email or face-to-face meeting. They will appreciate it if you send them reminders of their past due payment. More often than not, business owners are more comfortable sending emails as a way of reminding clients of their past due. However, this method can be impersonal and may not give a sense of urgency to the client. It is important to encourage good communication so you can strengthen business relationship with your client.
Refer Delayed Payments To Collection Firms
When all else fails, you need to consider turn over the matter to a collection service provider. The firm will be able to provide you insight on how you should deal with late payers. These firms are well aware of debt law and will be able to enforce various tactics to ensure that the payment will be secured as agreed. These firms also tend to be aggressive if necessary.
