Credit Control – do you control it or does it control you?
So you have invoiced clients, stuck your tems on them – posted or emailed them and then sit back and wait for the money to hit your bank account …. really??
In these credit crunch days only one thing is certain – and that is your clients will try and delay payment for as long as they can – after all – its better off in their bank account than your – right?
So do you put up with it or do you alter the whole way you go about chasing your outstanding invoices.
What terms do you have on your invoices? 30 days? To your clients they read this as 45 days – so firstly, alter your payment terms – make it 14 days – knowing you should get paid within 30 days.
What next? Well do you bother to check with clients that the invoice is correct and they are happy with it? You do it after the 30 days … are you mad? Give them two days to receive and digest your invoice then ring them up – ask them if they firstly got your invoice, then ask them if its all ok – this then cuts out the delay of them asking for clarification at the 30 days deadline.
Right, so the invoice is happily sitting on someones desk – do you know who it is though responsible for paying it? Make sure you do – make friends with them on the phone – its good to get a name – and good to be friendly with them – means they will place your invoice higher in the tray for payment.
Right so its day 14 – that is assuming you have changed your payment terms – what about a nice chatty email reminding them that your invoice needs paying today – don’t forget to put in the ‘please do ignore if you have paid this already’ line – you don’t want to get their backs up – just remind them you are around!!
So – its now day 21 – tut tut and they still ain’t paid – ok so another email – along the lines of please do let us know if you are having problems come chat to us kind of thing – this will often make various pay you just to prove they are not having problems.
So it gets to day 28 – time to make phone calls – they really do need to know that you are on the ball and not willing to be fobbed off – but don’t forget – friendly gets you further than shirty and shouty!
When you have followed the above a couple of times with the same client – they get the message and realise the hassle of having you contact them all the time – and start paying you quicker and quicker, so that one day you do actually get paid on day 14 – it really does work.
After all, think about it – if someone is making a lot of noise – be it email or phone calls or if someone is not chasing apart from sending you a statement on day 30 – which one would you pay attention to? Yep the proactive one!
A couple of quick tips for you – if you are a small company – literally a one man band – its very often easier to rope someone in – ie wife/husband/brother/sister/mother/father/friend to make those phone calls for you – make them the bad guy and you can then retain the client relationship, the old good cop bad copy routine.
Final tip: If they use the old cheque lost in post/dog ate my homework excuse as to why they are paying late (hopefully won’t happen after month 1) – don’t make it sound as if you don’t believe them – let them save face and just accept it – it helps maintain the good relationship you want with client.
Oh and if you choose to take on board this method of getting paid – just remember – someone will do it to you too …
