How to get paid in a tough economy

Updated: January 01, 2012

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

  1. Get paid at the time of service
  2. Invoice customers on a regular basis and as soon as the work is complete
  3. Make sure your invoices have the due date clearly visible
  4. Change your payment terms, if your terms are net 60 or net 45 change them to net 30 or net 15
  5. Offer an early payment discount to anyone who pays early, such as 1 or 2% off the bill if they pay within 10 days
  6. Act early - when an account reaches 30 days, take action
  7. 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
  8. Be as flexible as you can with payment plans
  9. 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

  1. Get paid at the time of service
  2. Invoice customers on a regular basis and as soon as the work is complete
  3. Make sure your invoices have the due date clearly visible
  4. Change your payment terms, if your terms are net 60 or net 45 change them to net 30 or net 15
  5. Offer an early payment discount to anyone who pays early, such as 1 or 2% off the bill if they pay within 10 days
  6. Act early - when an account reaches 30 days, take action
  7. 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
  8. Be as flexible as you can with payment plans
  9. 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.

,
Featured Research
  • Business Meeting Showdown

    It is no secret that communication and collaboration are at the heart of success and longevity for any business. However, as businesses become more global and more employees work remotely, video conferencing is being increasingly used as an alternative to face-to-face interactions. There are pros to both business travel and video conferencing such as personal connection and ease of use. However, there are cons as well ranging from travel delays to being technologically reliant. more

  • Mobile Communication Showdown

    It's no secret that businesses are becoming agiler and employees are spending more time away from their desks. The question isn't should we get rid of our landlines, but how quickly can we replace them?However, staying connected with your colleagues, clients, and customers is absolutely essential for cultivating long-term, lucrative relationships that will help your company achieve success. more

  • Signs you are Ready for Mobile BI

    With workforces moving more and more mobile on a daily basis, it is essential to ensure that your company is able to arm your employees with the analytics that they need to succeed. 89% of business leaders believe that Big Data will revolutionize business operations in the same way that the internet did. These numbers show the trend towards investing in a BI system. more

  • 15 Ways to Optimize Your Contact Center

    We live in a time where customer experience is seen as an important competitive differentiator. Given this, wouldn't you like to make sure that your contact center is fully optimized to meet your business needs? Deciding to upgrade and optimize your contact center is a big step, and one that shouldn't be done without due diligence and plenty of research. more

  • Stress-Free Video Conferencing

    It should shock no one that video conferencing technology is an amazing tool to connect and engage with business contacts in a more personal and effective way. In fact, only 7% of how we communicate is through words, whereas a whopping 93% is through tone of voice and body language. To further the strength of video conferencing, 99% of professionals feel that by improving communication and collaboration, productivity will be positively impacted. more