How to get paid in a tough economy
Business owners everywhere are asking me how they can get paid when their customers are suffering with job loss, house loss and the rising prices of everything.
Something to remember when you are being lenient with customers that are past due is that if someone owes you money, they probably owe others money and who ever takes action first, will get paid first.
Remember, you have to do it! It is like cleaning the bathroom, it must get done. If you don't want to do it, hire someone to do it for you.
I want to share with you some tips that will help you to get paid while the economy is suffering
- Get paid at the time of service
- Invoice customers on a regular basis and as soon as the work is complete
- Make sure your invoices have the due date clearly visible
- Change your payment terms, if your terms are net 60 or net 45 change them to net 30 or net 15
- Offer an early payment discount to anyone who pays early, such as 1 or 2% off the bill if they pay within 10 days
- Act early - when an account reaches 30 days, take action
- Call big accounts or accounts with large balances 10 days BEFORE the invoice is due to make sure they have the invoice, that they have the correct address to send the check and that there are no problems and that it is scheduled to be paid
- Be as flexible as you can with payment plans
- When setting up payment plans remember that you want as much as you can get as frequently as you can get it
10. Be picky about new customers
11. Have a strong contract
12. Run weekly accounts receivable reports and follow up with any accounts that are past due or becoming past due
13. Don't extend credit blindly
14. If a business owes you money, visit them. If it is a restaurant, go there for lunch, if it is a printing company, get something printed or copied. Every time you walk in they will see you and it reminds them that they owe you money
15. Have the salesperson who made the sale collect the money or with hold their commission until the bill is paid
16. Reduce minimum orders, you could possibly get more orders for less money paid up front
17. Use a collection agency
Doing any or all of these things will help you to get paid more of the money that is owed to you, and cause you less stress. Remember that while the economy is struggling, so are your customers, many who have never had a problem paying their bills before. Make sure to identify which customers have always paid on time and are now having a problem and those that have been late payers and might be trying to milk the system. Taking any or all of these steps will only help you to collect money in the short term but without making changes, such as having a credit policy, or checking credit BEFORE extending credit, you will be right back where you started next month.
Be flexible but don't let yourself get taken advantage of, remember to be firm unless you like working for free. It is up to you, cash flow problems are preventable.
,Business owners everywhere are asking me how they can get paid when their customers are suffering with job loss, house loss and the rising prices of everything.
Something to remember when you are being lenient with customers that are past due is that if someone owes you money, they probably owe others money and who ever takes action first, will get paid first.
Remember, you have to do it! It is like cleaning the bathroom, it must get done. If you don't want to do it, hire someone to do it for you.
I want to share with you some tips that will help you to get paid while the economy is suffering
- Get paid at the time of service
- Invoice customers on a regular basis and as soon as the work is complete
- Make sure your invoices have the due date clearly visible
- Change your payment terms, if your terms are net 60 or net 45 change them to net 30 or net 15
- Offer an early payment discount to anyone who pays early, such as 1 or 2% off the bill if they pay within 10 days
- Act early - when an account reaches 30 days, take action
- Call big accounts or accounts with large balances 10 days BEFORE the invoice is due to make sure they have the invoice, that they have the correct address to send the check and that there are no problems and that it is scheduled to be paid
- Be as flexible as you can with payment plans
- When setting up payment plans remember that you want as much as you can get as frequently as you can get it
10. Be picky about new customers
11. Have a strong contract
12. Run weekly accounts receivable reports and follow up with any accounts that are past due or becoming past due
13. Don't extend credit blindly
14. If a business owes you money, visit them. If it is a restaurant, go there for lunch, if it is a printing company, get something printed or copied. Every time you walk in they will see you and it reminds them that they owe you money
15. Have the salesperson who made the sale collect the money or with hold their commission until the bill is paid
16. Reduce minimum orders, you could possibly get more orders for less money paid up front
17. Use a collection agency
Doing any or all of these things will help you to get paid more of the money that is owed to you, and cause you less stress. Remember that while the economy is struggling, so are your customers, many who have never had a problem paying their bills before. Make sure to identify which customers have always paid on time and are now having a problem and those that have been late payers and might be trying to milk the system. Taking any or all of these steps will only help you to collect money in the short term but without making changes, such as having a credit policy, or checking credit BEFORE extending credit, you will be right back where you started next month.
Be flexible but don't let yourself get taken advantage of, remember to be firm unless you like working for free. It is up to you, cash flow problems are preventable.
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