ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How To Deal With Slow Paying Clients

Updated on January 2, 2017

Every business has at least one or two (maybe more) slow paying clients on it's books. As most small businesses don't have a huge pile of money lying around, unpaid bills can become a bit of a nightmare. There's a very true saying in business that goes along the lines of 'cash flow is king'. It's for this reason that we've put together these tips and tricks to help in giving those pesky debtors a gentle nudge into paying your invoice.

Payment Terms

This point comes first as it can't be stressed enough. Most customers pay late. In fact, on average the majority will go more than two weeks over the terms stated on your invoice. With this in mind, try and take two weeks off of your terms to make up the difference. For example, instead of the standard 30 days, which as we know would normally get paid in about 45 days, give your clients 15 days with the expectaction that they will take 30.

Tip: At the foot of your invoices write "As a small business, we always appreciate speedy payment". Honesty wins favour with clients.

Payment Options

Your customers won't like it if you only allow them to pay in cash. So, by giving customers the option to pay your invoice via multiple methods, such as cheques, over the phone and online payment services like PayPal, you make it more convenient to pay. This also allows customers who are short on funds to pay using their credit cards. Statistically, the more payment options you can give a client, the faster they will pay.

Send A Reminder

Any customer is more than a week past due should be sent a gentle reminder that your invoice is still outstanding. Put your clients shoes on for a moment, desk spilling over with paperwork, hundreds of emails coming in. It's easy to miss something. Therefore, a quick and friendly reminder phone call isn't going to upset them, but it'll help get you paid.

PO Numbers

Most large organisations require whats kown as a purchase order request from the person who is placing that order with your company, before the accounts department will pay the invoice. When you receive an order from a new customer, ask whether the company requires a PO. If so, the person placing the order should provide you with a PO number that's specific to the works you'll undertake. Include this number on the invoice you send. This will ensure that accounts department can match your invoice with the corresponding purchase order and authorise your payment in a speedy fashion.

Talk

Never underestimate the power of a professional relationship with your clientele. Get to know them, develop a true understanding of their business and find out who's in charge of paying the bills. If you can’t meet your customers in person, meet them over the phone. Communicate. Learn their names and don’t forget these people during the holidays when you are sending thank you cards. People who know you as a person will do their best to make sure your company gets paid. This is especially true if they know you to be a nice person.

Tip: Don't set aside a day each month to send invoices. Instead, send them as soon as works are completed. This means it's fresh in your clients mind and is proven to speed up payments.

Play Hard Ball

When you've done several jobs for a client, sent several invoices to that client, and still not received any recompence. It's time to play hard ball and put a halt to all works until payment is made. At this point, communication is key. It may be that the accounting department has genuinely missed your invoices, but don't wait for them because you'll probably be waiting a while. Instead, give them a call! Most people will apologise for the delay and pay there and then.

Offer A Discount

Offering clients a discount is something that should only be done if the business is really struggling with late debtors, and after all other options have been exhausted. Upon any given invoice a discount of 1 or 2% can be offered to grab the attention of your customer, but the discount will only be granted if the payment is made before the due date. This will help to shift the power into your hands and force a slow paying account to get a move on. However, whilst your business may get the money in sooner, it will be slightly less.

Late Fees

Again, late fees are something of a last resort and should be no means be implemented with clients who are only a couple of days overdue. As most business owners know, some customers just dont want to pay, but what if paying late came at a cost. Adding interest, even an amount as small as 1.5% should be enough to make them get that cheque in the mail. Late fees can annoy clients, so only use this tactic if really needed.

Tip: Although tempting, never loose your temper with clients over late payments. You don't want your business to get a reputation!

Has this article helped your business get it's late invoices paid?

See results

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)