No matter who you’re talking to, money’s an uncomfortable subject. It can be especially frustrating for businesses with unpaid invoices. Even your best, most loyal customers may be slow to pay at times.
Contacting them can be tricky. You need to find a way to make them pay without damaging your relationship and discouraging future sales. Here are a few tips to help you navigate the process.
Before reaching out, review the unpaid invoice. According to SME Magazine, suppliers frequently send invoices with incorrect financial values, such as:
Poorly written invoices often lead to delays. If there was a mistake, you might need to review the invoice with the customer or issue a new one.
Take a look at your contract as well. Perhaps the payment schedule was not clear. Check that the product was delivered one time and whether there were any complaints. The delay might be the result of a customer service problem.
If you’re certain everything was right on your end, go ahead and send a reminder, but make sure it is cordial. Remember, there are a lot of reasons why a payment might be late. It could be a cash flow issue or plain old forgetfulness.
Always give customers the benefit of the doubt. Making accusations or demands not only sours your relationship, but it might also cause the customer to dig in their heels.
Often a simple phone conversation is enough to resolve the situation. Just make sure you’re prepared. Have the unpaid invoice in front of you, along with any supporting documents, so you are ready for any objections. Work out what you want to say before you pick up the phone. Choosing the right words helps ensure your conversation stays friendly.
It’s common for businesses to pay beyond a deadline if they know they won’t be subject to penalties. If there is a late fee, they may choose to pay on the last possible day, often at the last possible hour. If these “just-in-time” payments don’t work for you, have a conversation about a payment plan that does. Incentivize early payments, penalize late ones, or simply adjust your terms.
Words like “please” and “thank you” will do a lot to prevent hurt feelings. Besides keeping your conversation civil, they show your customers you respect them.
Remember, customer service is still the key to healthy business relationships. In fact, 33 percent of Americans say they would leave a company after a single instance of poor service. Keeping things cordial, even when handling collections, is the best way to proceed.