Late & Non Payers, What can you do about them?

ontheway

Apart from doing background checks on customers before engaging in a contract, can anything be done?.

For example if a customer asks me to a do a job them, and it is agreed that the job will take (x) weeks to complete, I ask them for an initial payment (an agreed percentage of the final quote, upfront). I then give them 2 weeks or so to make this payment. Then on delivery of the completed job, I give them another 2 weeks to settle the balance.

Are my terms too harsh? as I have had some customers not bothering to pay me up until 2 months after they were supposed to. I have sent emails asking them "have they sent payment" for the invoice sent on date (y).

I have heard of the old saying "the cheque is in the post", but surely there is a better way handle this in this day and age.

Any suggestions as to what I should do?. I don't want to be harrassing my customers, but what is acceptable and what is not. What would you do in my shoes?

I'm reading a lot of good business books and the common theme running throughout the book is never be afraid to ask for what you are owed, simple as that! These people owe you money, they may not be happy with you ringing them but tough, they owe you money, they will respect you in the long run. Don't be a walkover.

madmik

if my payment was two months or more overdue for work i completed on time i would send a registered letter to the manager or owner detailing amounts owed and dates invoices were sent
and state that if payment is not made within 7 days the debts are being handed over to interim justita or another well known debt collection company and this will have additional costs etc

dont let them take the pi$$

Andrea B.

Of course it's dependent on service/goods, but my initial approach is to telephone or call on the basis of follow-up and politely ask if everything was okay with work done or goods received.

This normally lowers their guard and if feedback is then positive ask if it is possible to settle accounts.

Luckily I have never had a need to go beyond this. Keep the "horns in" for as long as possible. It can be the difference between at least getting a part-payment as opposed to none.

faceman

OP, do you have a contract with your customers that sets out your terms and conditions and payment schedule? If not, get one, its crucial when it comes to enforcing payment terms. A solicitor can assist and wont charge an arm and a leg.

Secondly, develop a credit policy outlining how you manage your customers and prospects from a credit and collections perspective. And importantly, stick to it! Its all too easy to put off making the phone calls only to find that you are then in a panic chasing the debt when its way overdue.

Know your customers, their payment habits, their business, the sector.

I use a symbol approach to credit management know as ATTACK:

Assessment - Know what to look out for in opening and ongoing real time monitoring of risk levels and exposure on all accounts
Terms & Conditions – Making sure they are completely clear and serve your best interests.
Teamwork – Getting everyone in your company to work together Administration – Get it right first time – Every time.
Collections – The right approach – The right focus – The right result.
KPI’s – What you should be reporting on and why.

Im happy to offer more detailed advice (at no cost!) if you wish.

You can also contact the Irish Institute of Credit Management too. www.iicm.ie

AARRRGH

I used to do credit control. You need to take the aggressive approach. In general you'll be speaking to the accounts payable person rather than the decision maker, so you won't be directly attacking the buyer

I was able to get about 99% of our payments (and there were a lot of them) within a short amount of time.

I used to ring them a few days after payment is due, and then every few days after that. I would try to get dates when the cheque would be sent. As soon as they started the "oh the cheque must be lost in the post" I would say, no bother, I will call around this afternoon and collect it. Normally this made them **** themselves and payment would be made that day, but if it wasn't I would call around to their office a few days later.

It's very aggressive, but **** them, they shouldn't be buying off me if they don't intend on paying.

statss

Hi guys,

I'm in the process of trying to develop a decent credit control system for the accounts under my responsibility. I need to be "on top" of my invoices and make sure that follow calls and letters are sent requesting payment. At the moment I am doing it manually, logging outstanding balances in an excel and then assigning tasks in outlook as reminders...e.g "call x after 30 days" ect.

I'm wondering if there are any excel or access templates out there that I could use to help streamline this task. Can anyone help? I have 200+ accounts to look after, with a team of 2.

Thanks.