Late payments can be quite challenging and time-consuming to recover. Here are some tips to prevent future late payments once and for all.
The secret of timely collections lays in the systematic and consistent credit management practices that should underpin your relationship with every customer. Dealing with late payments can be a tedious task, however it does not have to be. Protect your company’s cash flow and prevent late payment by following a few simple steps.
1. Business contract
Clearly state your terms and conditions of trade and ideally get the purchaser to sign them with their order.
2. Constant watch-out
Run a credit check of prospective customers. However, these may not help when you run into trouble with past buyers. So keep constant watch for warning signs like slipping payments, round-number or unsigned cheques.
3. Bill promptly
Invoice correctly and as soon as possible. Ensure that the pay-by date is clear.
Depending on the amount in question, follow up three days after posting your invoice and confirm whether they have received it and passed it for payment.
5. Overdue invoice:
On the overdue date, call and politely ask if there is a problem because payment is late and point out that interest is now accruing if necessary.
6. Documentation of calls
Keep notes of every conversation you have from now on and immediately fax the customer a summary after each call.
7. The payment is on its way
If they say they are going to process the payment at their earliest convenience, ask them to process it as an urgent payment.
8. The payment is on its way…again
9. Pay a visit
If the company is local, call and request a meeting to discuss or possibly finalize payment.
10. Write a letter
Send the customer a letter drawing attention to your terms and conditions of trade and enclose proof of chasing payment.
Would you like to make use of the time-saving expertise of Atradius Collections ?