Every business owner wants customers who pay their bills on time, but we all know that we will probably have at least one customer who fails to pay up. When it comes to collecting late payments, you want to make sure that you approach getting your money in the appropriate, most effective way. Here are a few tips on how to deal with customers who have outstanding payments.
Be Clear – The due dates on your invoices and statements should be clearly stated. Even more importantly, you always want to make sure that you have outlined your company’s late fee policies in a place that is easily accessible for customers. The consumer should be aware of the actions that you will be taking in the event that they are late on making payments.
Don’t Blindside – Do not blindside your customers with additional late fees. You want to maintain a positive relationship with your customers even if they aren’t paying on time. They will still share their experiences working with you with their friends, families and coworkers if they have a negative experience. Keep them aware of why they are being charged a late fee and why. Be sure that you can show them where and why they are being charged, if asked.
Follow Up and Check In – You want to be sure to check in with your customers. Start with a friendly reminder letter, email, phone call, or text message, but you don’t want to overwhelm them with nagging messages. This is only going to frustrate them. Sometimes all they need is a friendly reminder. With new web based software like SmartPay, you can even automate friendly email reminders to be sent automatically to customers who owe money.
Most importantly, put yourself in your customer’s shoes. Have you ever forgotten to make a payment because it wasn’t high on your priority list for the week? Would you like to receive three emails per day until you pay your bill? Think about that before you blast emails, call endlessly and text your customers into a state of annoyance.
Respect Hours – When calling customers on the phone, take care that you are being appropriate. According to the Telephone Consumer Protection Act of 1991 (TCPA) and the Fair Debt Collections Practices Act (FDCPA), you may only call your customers between the hours of 8 am and 9 pm. There are no regulations or guidelines for sending text message alerts, but take into consideration that some individuals sleep with their cell phones near their beds and may not silence them.
Consumer Privacy – This one should be a no-brainer but be sure to respect your customer’s privacy. Don’t leave messages with friends or family and do not contact them at work. Messages, account details and notices of late payments should only be viewed and discussed with the individual who owes money.
Seek Legal Help – If your customer still has not paid after your emails, phone calls, and or text messages after 90 days, it may be time to seek legal help. Before taking this type of action, try to understand why they cannot or have not paid. Help them understand their options for paying their outstanding bill and try to come up with solutions.
The person you are collecting from may be embarrassed or stressed out about the late payment. Find out why they haven’t paid and what you can do to help them. By following these tips and being an effective listener, you will be more likely to collect outstanding payments and maintain a positive relationship with your customers.
It is not easy to collect payments from your customers, but it is important for the successful growth of your business. For more advice, follow us on Twitter and like our Facebook page for more information and insight into the billing and payment industry.