As a limited company owner or a small trader you will be responsible for dealing with every aspect of your business - from creating an attractive and persuasive product or service, through finding the right audience for it and ending up with marketising and selling it to them. In this article we will specifically focus on the very last step of your selling process - collecting payments from your clients. In the majority of cases, when the contract between you and the client buying your service of product is clear and straightforward, the process will be pleasant for both parties. However, it might happen that your client refuses to make the payment by the agreed date. Today we will help you find out the answer to the question of how to “chase after” non-paying clients without losing your reputation and money?
Although in the current economic condition it can be problematic for some of your clients to make the payment on time, every company had struggled with clients who are slow to pay no matter what the situation is. As a company director, you understand the importance of cashflow, as well as, the importance of keeping customers happy. Understanding the excuses late-paying clients tend to give and finding a friendly, yet professional way of dealing with them is a strategy which will allow you to run your business successfully.
Some clients might tell you that they themselves are waiting for the customers to pay them before they can pay you. Unless this is the condition that has been arranged before you made sale to this type of client, you have every right to demand immediate payment. If you especially care about the client that gives you this excuse, offer them flexible terms such as payment in instalments.
Another argument company directors hear often is a missing invoice excuse. Your clients might claim that they haven’t paid you yet simply because you haven’t sent them the invoice for the sale made. If you want to run a successful business, keeping track of all invoices should be the ultimate priority for you. Make sure every invoice you give your clients is accepted with their signature or a receipt, even if the deadline for payment is weeks away.
If your client finds another party to blame for the missing payment, you can still demand it to be made under different conditions. If, for example, your client is waiting for their accountant to return from holiday, you can check whether anyone else can authorise a BACS transfer, whether the person left pre-signed cheques for such instances, or confirm when they will return and contact them on that date.
These are the most popular excuses limited company directors and sole traders encounter. No matter how irritating or problematic these can be to your business, remember to always handle them in a friendly and professional manner. Contact the late-paying client immediately and remain in regular dialogue until the matter is set. Never complain about non-paying clients to others. It might hurt your company’s reputation in a long run.