Prevention is always better than cure – this is especially true with the vexatious subject of Credit Control. At Late Payer List we believe that there are a couple of simple strategies that you can implement to effect the behaviour of your customers and improve the cashflow for your business. Communication, both verbally and visually with your customers is paramount. Implementing these strategies is simple and easy to do. It will also potentially save you a lot of time, stress and money.
1. Update Terms and Conditions
Have a good set of Terms and Conditions in place. Make sure that they state your payment terms and your debt recovery processes. Having Terms in place means that there is no room for interpretation and you can also enforce them if needed. Your T&C’s should also include a condition that allows you to add all collection costs associated with the recovery of the outstanding debt to any outstanding invoice and should you join the Late Payer List also acknowledge the fact that you now use Late Payer List as a collection tool. Late Payer List offers a FREE set of Terms of Trade provided by our partner Lawpath, just sign up to our Small Business Plan and we’ll send you a link to get your free Terms. Lawpath have made things easy for you as they update the Terms and Conditions when the law that effects them changes keeping them legally relevant at all times.
2. Customer acknowledgement of T&C’s
Before you start any job make sure that your customers sign and agree to your terms and conditions. If your customers aren’t happy signing and agreeing with your terms and conditions prior to you supplying your goods or services maybe you should reconsider doing business with them. Don’t forget to check the Late Payer List database to make sure that another one of our members hasn’t already listed your potential customer for non payment. With regards your existing customers, communicate with them and let them know that you value their business and look forward to continuing to provide them with a great service and that in order to do that you have upgraded your T&C’s ensuring your business’s viability now and well into the future. All it takes is a simple email to your existing customers.
3. Late Payer List Logo
Become a member of LPL and use our logo as a visual prompt on your invoices. The logo clearly illustrates to your customers that you have a considered and robust credit control system in place and that you are serious about getting paid on time. The logo also reminds them which invoice should be paid before all of the others! All members of LPL receive a copy of our logo to include on their invoices.
4. Communication
Invoice your customers as soon as the work has been completed clearly describing the work that was done. Attach the quote number as an additional reference point so that there can be no confusion as to what work the invoice relates to. Make time to contact any customers that haven’t paid you within the time limits set out in your terms and conditions. Phone calls are always best but at the very least, send them a reminder email and text if possible. The longer that you leave it the harder it gets to retrieve the money owed to you.
5. Debt Recovery
In the rare circumstance that one of your customers doesn’t pay on time then try and find out why. Is there a dispute? Are they having payment difficulties of their own? Knowing the “why” will make it a lot easier to resolve the late payment without causing any further disruption. If all else fails then the Late Payer List can be an effective tool for you to easily use that will quickly resolve the payment issue. Should you have any questions or want to discuss upgrading your existing credit control processes please feel free to contact Frances at [email protected].
