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prevent delinquency Disaster
Sometimes, late payments can teach the business owner rather than the customer. Customers dragging their feet on payments if they are not satisfied with the merchandise or if they get inadequate customer service. Address customer complaints can speed up payments and keep the business profitable. Of course, there is always the occasional bad customer, but customers should not angrily attacked late payments. This can ruin your professional relationship and cause you to lose valuable customers.
It may be possible to save hard to deal with problem customers with vetting the advance. Running a credit check can save you time and money in the long run. Some companies offer affordable credit check prices to small business owners. The information you get from your credit report will help you determine if you want to stop taking certain customers.
If bad customer manages to make it through the screening process, you have no choice but to stop supplying that customer until you have added. This is not a step to be taken lightly, but it may be necessary. For example, a customer who is three months behind on payments should not benefit from the goods or services for free. If bad customers know they can get the product without paying for it, they will take advantage of the situation.
It may even be necessary to look into the professional collectors in extreme cases. May lose a client may seem like a bad business decision, but keep around which refuses to pay is even worse. Bad customers only serve as a drain on time and resources, it is always best to cut them loose
Make your customers knew Payment rules :.
Always outline the billing process and keep slush fund. While this may seem simple, not too many small businesses do not apply these rules. Clearly aware billing and payment rules leaves customers no excuse for paying late.
is expected policy should provide an acceptable form of payment and the date and time of payment by the customer is invoiced. It is important to follow these rules once they are established. Break your own rules will not encourage customers to follow them. You set the standard, and if you wait a month to even send a bill, it does not create a sense of urgency for your customers. Take time each week to send out new accounts and follow them out now.
It might also be wise to start a penalty fee of 3% on late payments. This serves two purposes :. It gives clients greater incentive to pay on time, so as to avoid a penalty fee, and also helps to negate the effect check cashing fees or reach their late fees the bank
A slush fund acts as a reserve and provides a cushion should the client will be a few days late on a payment. This will help keep you on payments now while you chase down what is owed to you. A good rule of thumb when establishing a slush fund to reserve large enough to pay rent, salaries and services for at least one month. Hopefully you will not use it, but it can keep you from being labeled as a bad client.
Unfortunately, late payments inevitable. Even with careful observation and clear instructions, customers sometimes “forget” to pay on time. There is nothing wrong with chasing down payments as long as it is done in a professional manner. Often polite email or call all customers need to remind them and resolve the issue
make it easier on customers :.
Some companies benefit from offering incentives for early payments or payments on time. Offering financial services or benefits to customers who pay on time sense. Not only does it give them added reason to pay their bill, it builds customer loyalty, and you want loyal customers who pay their bills on time. A two percent discount for paying within 10 days from receipt of invoice is typical in many companies. However, finding more creative incentives such as reward good customers can differentiate a company from another.
Accept as many options as possible to make it easy for customers to settle their accounts. Businesses that take only cash or guarantee, not make life easy for its customers. People seldom funds and responsibilities of others, such as money orders, are not free and take up valuable time. Although there are usually fees (up to three per cent) are connected to suppliers that accept credit cards, they may be worth checking out, especially if you have customers who use a credit card rewards.
In addition, banks are competing for small business and could have some affordable options that make your life easier. Look into the possibility of electronic transfer. This makes it easier for customers to pay their bills, and makes sound business sense if you have several repeat customers.
speech late payments to customers is never easy, but it must be done. There is no reason to make threats or become impatient. However, there is every reason to collect what is owed. Remember that late payments have an impact on cash flow, which determines how long your small business will survive. Highly uncertain economy needs small business owners to be extra careful when they are to monitor their payments and their cash flows.
For more information on how Bridge Capital are Accelerated cash flow solutions for business in Suffolk and Nassau area of Long Island, NY; Please visit our website for more great information on http://www.bridgecapitalsolutionscorp.com
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