A business is not about how many invoices you have issued but how many of those invoices actually got paid. Unfortunately, getting those invoices paid is not something that generally happens as soon as you have hit the send button on your email. In some cases, you have to wait for days before you can actually get the payment due you. In worst cases, you might even have to wait for a long time as well as deal with customers who would rather skip on their payment. To avoid cases like these, you would need two things – proper credit control and a reliable debt collection agency.
When it comes to credit control, one of the first things that you might need to put into place is a customer credit check that would allow you to establish if your client has the capacity to pay. This is especially important if the purchases involved are of considerable amount. No matter how long you have known a client, never assume that they can easily pay a major purchase by basing their track record with smaller purchases.
Make sure that you have a complete set of records. All invoices should be properly recorded and all payment should be reflected on the client’s account in a timely manner. That way, you always have an idea on how much your client owes you and how much payment your client has already made. One of the things that most business owners forget is this part which leads to their inability to collect since they are not sure how much the client still owes them.
If you make use of quotations or contracts, make sure that the wordings, especially those concerning due dates and effect of non-payment, are clear and easily understood by the other party. If possible, have a lawyer go through it so that he or she can check if ever there are loopholes particularly where payment is concerned. If possible, when sending invoices, indicate what the effect of non-payment is.
Once you have a credit control in place, make sure that you stick to it. If you have a policy of penalizing accounts that are a number of days past due, then make sure that you do it. This would help ensure the timeliness and the completeness of the payments that your client would have to make. Of course, it would help if your collection system is proactive. That means, you have to take active steps in reminding your clients about when their due date is so that they would have ample time to prepare the funds needed for their purchase.
Although sending an email is much easier, it would be better if you pick up the phone and call the client. Emails can be easy to ignore especially if you are the type who does not ask for a read receipt. A phone call, on the other hand, is harder to ignore. Even if the client has a caller ID in place, a call using a different number can still connect you to the person you are looking for.