3 Steps for Recovery of Dues
Outstanding payments are a big problem for many small businesses, including clinics. These not only adversely effect the bottom line but also disturb the cash flow seriously.
Recovering these is even more tiresome than their financial impact. Calling people who don’t answer or sending emails that are ignored is common. Do you have a routine or schedule to call up people and dread making those calls?
Let’s make it more efficient.
1. Set up automated reminders. This needs to be done in your billing software. Sending automated reminders every 5-7 days is a good practice for overdue invoices. The reminder can be sent by email or SMS or both. In fact, if you are sending SMS, you should follow it up with an email also. Emails can be more polite and can also have attachments, i.e. copy of the outstanding invoice.
We are all used to receiving reminders for payments of phone bills, electricity bills etc. We do not mind receiving these. We know these are automated and it’s not that the company is chasing us unnecessarily. Make it clear in the text of your reminder that this is an auto-generated reminder and please ignore if you have already paid. This makes it less of a personal affront. Your reminder should also include a line that says something like this: We would greatly appreciate if you reply this email and indicate when we can expect the payment.
Sneak note: If your software can't send automatic reminders, set up reminders for yourself to send the email manually but still add: This is an automatic reminder. Please ignore if already paid.
2. Make it easy for the client to pay. The best is to have a link in the reminder (SMS or Email) that the person can click to pay online. Preferably this link should not need registration or login – just click and pay.
Give multiple options for payment such as bank transfer, ATM deposit, cheque deposit. When there are multiple options, the person feels they have a choice and are in control as to when how they will pay. Giving them this feeling makes them more amenable to paying sooner rather than later.
3. 1-2-3: Call. If there is no response after two automatic reminders, it’s time to call. When the other person has already received two emails and done nothing, they need an extra push and may be wanting to talk about a payment plan or a discount. That decision is, of course, up to you but remember money in the bank now is better than more money that may never come.