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
  • Why Q4 is the Perfect Time to Invest in Video Conferencing

    If you’re currently relying on an outdated video conferencing solution - or if you don’t have one at all - you’re in luck. While any time is a good time to invest in video conferencing, Q4 may be the best. One big reason is that Q4 is when you can get the best deals, but there are also other important factors like increased access to seasonal employees. more

  • 8 Ways to Get More From Your VoIP System

    Many businesses adopt VoIP to take advantage of the cost savings without spending enough time reviewing the features and benefits made available by different solutions. If this is true for your business, there’s a good chance you could be getting more from your VoIP system in the form of even lower costs or improved employee productivity. You may even find that your current software offers features that you aren’t taking advantage of! more

  • Best ERP Features and Benefits for Your Business

    Are you considering investing in ERP software for the first time? Or maybe you already have an ERP solution but you’re worried it’s becoming dated. If either of the above apply to you, read our latest guide on the top ERP features and benefits based on the size of your business. You may be surprised at how versatile and cost-effective it is becoming - regardless of if you own a small business or run a large enterprise. more

  • 9 Spooky Signs You Need a Contact Center Upgrade

    When was the last time you evaluated the performance of your current contact center and the software you are using? The results may be frightening! If it’s been awhile since you invested in contact center software, there is a good chance that your needs have changed or that there are better options available now. Fortunately, it’s relatively easy to determine if you need an upgrade or not. more

  • 7 Ways the Wrong Phone System Can Haunt Your Business

    The wrong phone system could be haunting your business - and we’re talking about problems more serious than ghosts and ghouls. From increased costs to issues with scaling, we’ve identified seven important ways that a less than ideal phone system could be holding you back. You’ll be surprised at how much of a difference this can make to your bottom line too. more