Tips On The Best Way To Collect Overdue Payments From Your Customers

Small business run into all sorts of issues but one of the biggest challenges faced is how to keep a positive and consistent cash flow. There is only so much you can do within your business operations, but eventually it comes down to your customers. When customers do not pay on time it can cause major setbacks. So here are some tips for collecting overdue payments:

-Inspire Good Will: The immediate reaction when dealing with customers not paying is to use a heavy handed approach. By using a simple greeting or a small reminder, customers may respond better. Showing that your relationship with your customers is valued can remind and inspire them to do the right thing.

-Act Quickly: When the customer first misses the payment, start making phone calls followed by letters or emails to upper-level managers. You can also offer the option to pay in installments or offer reduced settlement payments if other tactics do not work. Last resort is calling a collection agency.

-Keep Detailed Records: Keeping accurate and very detailed data of the status of your receivables is crucial. A small business needs to keep a record of all the invoice dates, payment terms, every phone call, email, late notices, and any other communication with the customer. When writing a correspondence, be sure to clearly state the consequences which they will face if the payments are delayed any further or not paid. If anyone tries to argue or fight against the consequences, you will be prepared with all the necessary information.