I can tell you from my experience in dealing with hundreds of businesses and picking up the pieces of deals and debtors gone bad – a good sales process is critical to setting a solid foundation for getting paid on time.
At CreditorWatch Collect we help businesses with software and services to improve all stages of the process, from debtor management, sales, invoicing, follow up calls and legal action if needed. You might wonder what your quote, or sales process, has got to do with good debtor management.
In our survey of 150 businesses (mostly business owners), the number one reason for paying an invoice on time or early was that their supplier did a great job.
How do you ensure you can do a great job? It starts by choosing the right customer and then confirming that you can deliver according to their needs.
Lesson #1 – Are you doing work for people you should have actually said no to?
This is especially true for professional services. Customers come in all shapes and sizes, but what shape and size customer is perfect for you? What type of customer do you love working with and have complete confidence you can deliver according to their needs and expectations?
Doing work for your ideal customer type (or ideal customer profile) sets you up to succeed in so many ways. I also understand that saying no to deal is really really hard, especially when you’ve got payroll to meet!
An easy way to start is to think about your favourite customers, then grab a piece of paper and jot down some of their characteristics and commonalities, for example:
- How long has their business been operating?
- How many employees do they have?
- What industry are they in?
- Who makes the buying decision vs who pays the bills?
- Where did the enquiry come from? (Google, Word of Mouth, etc.)
- When do they usually pay your bill?
Take some time to think about your ideal customer type, then go find more of them and show more love to the ones you already have!
Lesson #2 – How to make a ‘great sale’
When it comes to making a sale or quoting, I often get asked questions like:
- Is an email or a handshake enough? Do I need to put it in writing?
- At what stage of the deal should I make a new customer aware of my terms of business?
- Should my terms be displayed on my website or on my invoice?
- Are my terms of business ok? Or fit-for-purpose?
Customers hate surprises. Surprise bills. Surprise delays or problems with the job. Surprises like you not turning up on time. Surprises like these erode trust and cause problems when it comes to getting paid on time (or at all).
Sometimes a customer’s disappointment will come as a surprise to you. You assumed they already understood how you work, what was being delivered, how much it would cost and when payment would be due. But often that’s not the case, our eagerness to jump into the job leads us to miss outlining these critical points.
On the flipside, delightful surprises like you finishing a job early, under budget or simply doing what you promised goes a long way to getting paid fast and getting referrals for future work.
The key to avoiding surprises (apart from being super skilled at what you do) is to set clear expectations from the outset. This is what your quote and terms of business do for you. Quoting should not be an issue – do it well and you can save yourself a world of pain later on.
Lesson #3 – How sealing the deal correctly can save you both time and money
No matter how excited you are about winning the deal, try to resist the urge to jump straight into doing the work without first getting confirmation in writing (an email is fine) about the basic terms of the deal.
The basic terms of any deal should include these critical points:
- What you’re going to do
- What you expect your customer to do
- When the job will start and when it will finish (if it’s unknown, then make it clear)
- How much it will cost
- When payment is due. Are you offering credit? And on what terms.
- What happens if there is a dispute about the job or experience
- What happens if payment is not made on time
Once these have been established, your customer needs to agree in writing to these terms. It might sound like a long list, however, once you’ve created your quote template (either in specialist quoting software or an email template or document) then it’s easy to rinse and repeat and make great sales all the time. Selling like this also shows you’re professional, organised and skilled at what you do – increasing the chances of closing a deal.
Not sure how to structure your sales process to help you get paid on time? Book a call with a specialist for a complimentary 30-minute consult.