5 Tips on Getting Your Customers to Pay Their Bills

Getting customers to pay up quickly is a critical part of business. Here are 5 ways to ensure that your customers don’t turn into payment laggards

Cash-flow is king, and getting your customers to pay up quickly is a critical part of business. Here are 5 ways to ensure that your customers don’t turn into payment laggards.

1) All Things Spooky says that “you should definitely investigate each new customer's credit rating before you advance him any credit. Tell him of your credit terms verbally, and print them on your bills, and also state the customers are liable for reasonable collection fees. If you make it a practice to bill your customer promptly, you'll find that your customers are more apt to pay promptly. On the other hand, if you run your business in a slipshod manner, you'll find your customers slipshod in their dealings with you.”

2) The BBC advises that you should "produce the invoice promptly. The invoice is in effect the first request for payment and should be sent out immediately the goods are supplied or the work is done. Remember too that the sooner the customer receives the invoice, the sooner it gets into his or her payment process. The invoice should be accurate and clear and should contain all the information required for the customer to pass it for payment, including the customer's purchase order number.” Most importantly the site goes on to state what should be obvious but is all too often overlooked, that “the invoice should also say precisely when and where you expect to be paid – ‘payment due by’ ‘payment should be made to’. ‘Net 30 days’ is not good enough - it is open to interpretation and argument.”

3) How-to.com advocates that for ongoing customer relationships you can "add new charges to the old bill. Many times people who have not made good on bills will come in and try to buy more from you. If a late-paying client wishes to make another purchase, ask if they would like to add it to their past-due bill. Of course, you don't want to conduct further business with them until they have paid you what is outstanding. Go through your payment procedure as usual and simply interject at some point whether they would like for you to add what they owe from the last purchase to this one. In most cases, they will pay the whole tab right then since the issue has been brought up.

4) MoreBusiness.com advocates sending “monthly statements listing your customer's payments and all unpaid invoices. You will find some customers may not keep accurate records, even losing or forgetting to record your invoices. Sending statements will also alert your customers that you are aware of outstanding invoices and you expect prompt payment. If you don't, you are inviting exploitation by unscrupulous customers. Statements are worth the time and postage.”

5) BNET.com suggests “If the past-due date for a bill has come and gone, immediately send the first collection letter. The day the payment isn’t there on time, establish an iron fist and a velvet glove.The tone of the letter is critical. Let the client know that it’s about more than just money — the business relationship is also at stake. And send collection letters in an oversized priority envelope that screams, “Important!”

And if those tips aren’t enough, 5min.com has a short handy video on the subject.

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