Late payments are nothing new. Often they seem to be an accepted part of doing business. So, how can you actually get paid faster? In this article, we’ve put together our top tips to break the cycle and get your invoices paid faster.
1. CUSTOMER RELATIONSHIPS:
Good customer relationships really do have benefit across the spectrum of business. And when it comes to payments it’s no different. If you’ve got a strong relationship with your customers they will find it harder to put you at the bottom of their payments list. Equally if they are having a tough time, they’ll feel more comfortable opening up to you about it and working out a solution rather than just avoiding you altogether.
2. YOUR TERMS:
Having clear terms and conditions, including expectations around payment is a mandatory part of business. Who should get credit, and how much? Are there certain types of customers or products that should not be eligible for credit? Will you accept part-payment? If they are a residual late payer are they still worth having as a customer? You should be able to answer all of these questions prior to invoicing a customer. And, before an invoice lands in their inbox, the customer should be clear on them as well. If you haven’t shared these with your customers and haven’t received their agreement on them prior to starting the work, you are setting your business up for issues down the track.
3. KEEP YOUR COOL:
Getting angry is not going to solve the problem. More than likely, the later payer will just ghost you. It can be hard not to lose your cool when communicating with someone who just won’t pay their bill. But remember, most people don’t actually want to pay late. So have a chat with them and uncover what’s driving the late payment behavior.
4. HAVE A PROCESS:
An automated AR process is really going to help you get those payments in on time. With customers receiving clear, tailored communications at key points in the payment journey it makes it much harder not to pay. Plus if late payment is occurring due to a dispute or lack of invoice then having the automated, timely comms will flag this immediately. You’ll then be able to resolve the issue efficiently and get their payment in much faster. CreditorWatch Collect’s automated AR software is quick to set up and integrates with the major accounting systems like Xero and MYOB. It’s low risk in terms of investment and the gains you get back in cash flow and time are huge.
Have your payment problems spiraled out of control? Is credit control a task you avoid as you just don’t like making those calls? If these sound familiar, then outsourcing your AR to a specialist could really work for you. While there are costs associated with this, you’ll get whatever you invest in the specialist back and more. Using an AR specialist means you get the benefit of someone who does this daily. They know all the tips and tricks and maintain a strong customer relationship whilst dealing with even the harder customers. Plus you don’t have to worry about customers querying who they are. An outsourced AR specialist should approach all communication as a representative of your company – your customer won’t know you’re outsourcing the pain.
Ultimately, the key point when it comes to trying to stem the wave of late payers is having a plan. Knowing how you’ll approach it when it happens, what your limits are and at what point you’ll seek help to automate your process or manage your credit control.
Get paid faster and save time managing your AR with CreditorWatch Collect’s automated AR tools. If you’d like a no pressure chat about how AR automation works or how outsourced AR specialists can fit into your business get in touch, we’d love to chat.TRY FOR FREE