When Should you Start Chasing for Payment?
Chasing for payment from your customers is a delicate balance of customer service and actually chasing for money owed. As you become familiar with a customer and build a relationship with them you should be able to identify the ideal tone in which you should speak to them (formally or informally) and what usually encourages them to pay.
So the question is, what steps can you take during the first stages of a customer relationship that will encourage them to pay? Alternatively you might want to use my advice and apply it to existing collection strategies that aren’t working well.
When should chasing for payment begin?
First contact with a new customer should be before payment is even due; however the tone of the call should be as a customer service call rather than a collection call. I tend to lean towards making this initial contact a phone call rather than an email, from my experience a phone call is much more personable and therefore you will be off to a positive start with your customer. Depending on the payment terms, I would suggest making this initial contact around a week after the invoice is sent.
What should be in your initial phone call or email?
Introduce yourself (perhaps even make small conversation if your customer sounds receptive), anything to begin your relationship in a positive way, explain that you just wanted to double check that they have received their invoice and that there are no problems. Obviously if there are issues, let them know that you will seek resolution as soon as possible (and stick to it). Remind them of payment terms and let your customer know that you will call at a later date to confirm a payment date with them if that is agreeable.
When should you contact your customer again?
If your customer has no issues, you should aim to contact them again a few days before the payment will fall due. This phone call (or email if you wish) should determine an exact payment date and what method they will be using for payment, as each method will determine what date the money will hit your bank.
These steps may seem simple, but they will go a long way to not only let your customers know that you will be on top of payments due, but in establishing a positive relationship with a customer, that in itself can encourage them to WANT to pay you on time.
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