How to Make Sure Your Customers Pay the Bill
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How to Make Sure Your Customers Pay the Bill

Getting paid for your work is the most important aspect of business. If you don't get paid then you can't pay your bills. Here are a few tips to make sure you get paid.

Getting paid is probably the single most important aspect of running a business and one of the hardest things to accomplish. Especially when the economy is slow like it is now. Most businesses start to tighten up their purse strings in such an environment which can make getting your money a real challenge. But assuming you’ve taken the time to develop a solid credit policy, it will soon become time to make sure that your customers do pay the bill.

Getting Paid Starts with the Invoice

The process of getting paid on time starts from the point when you write the invoice. To start your invoices have to go out in a prompt manner. When the job is done the bill goes out. Everyday that you fail to write up an invoice and get it sent out is an extra day that you have given the customer to make a payment. If you have a contract that allows for periodic billing then don’t miss that billing period. Too many people procrastinate when it comes to writing up an invoice. But if they don’t have the bill you won’t be paid.

Keep Your Invoices Clean

Your invoices also need to be clear and concise. Make sure you are specific about what the bill is for. The date issued needs to be accurate, the due date, and the terms. You should also state what penalties will be enforced if the bill is paid late and if you give a discount for early payment. Most accounting programs allow you to customize your invoices, which will let you include all of these details.

Beating the Payment Deadline

Another thing to keep in mind is that many large businesses only send out payments once or twice a month. So if your invoice is late getting to them you may have to wait until their next payment cycle. The flip side of this is if you beat the deadline you may get paid early. Knowing the accounting practices of your customers is always a good thing. As well as being on a first name basis with the accountant that sends out the cheques.

Being Prompt with Your Follow up

Just as you need to get your invoice out on time you also need to be prompt about giving them a call. You can give a customer a courtesy call about 10 days before an invoice is due. It’s not uncommon to find out that they didn’t receive the invoice and so this allows you to get them another copy. If after 30 days you haven’t received a payment then it’s time to make a collection call. You don’t necessarily have to call on day 31. A grace period of 5-10 days is usually ok. Many businesses will wait until day 30 to cut the check. That way if you do charge penalties they can cite the date on the check to show it was not paid late.

Making the Collection Call

When it comes to collection calls remember the person on the other end of the line is just doing a job. Being rude or pushy with them is not going to win you any friends and most likely will just make them more resistant to paying the bill, not less. Just as with your customers and suppliers you want to develop a relationship with them. Because you’ll probably find yourself talking to them in the future. And they may provide you with some very helpful information.

Don't Give Up

If you still are having problems getting paid then you must persevere. Collection letters will most likely find their way into the trash. You have to keep making those calls. And make them regularly until you get the desired response. As a last resort you may have to pay them a visit. Make sure to inform them that you are coming. Set up a meeting if possible. And if all else fails it may be time for a collection agency or even your lawyer. Most collection efforts never go that far. But once in a while they may. And in the collection business you need to be prepared for anything.