Collecting Late Payments Without Harming Your Customer Relationships
Managing customer relationships is an important but sometimes difficult skill for any business owner to master. MarketingProfs explains that some of the most effective ways of establishing a positive customer relationship include:
- Good communication
- Providing effective customer support
- Considering customers in your marketing initiatives
- Sending greetings cards
However, keeping a positive and trusting relationship with your customers is made more difficult when the issue of a late payment arises. Even your most faithful and long-standing customers can become late payers, so it's important to work towards maintaining the relationship you've built to avoid jeopardizing your firm's reputation. Arrowhead Consulting provides some valuable tips here.
Stay Calm and Keep Emotions Out of It
Hilton-Baird Collection Services notes that there are numerous reasons a customer might not pay on time, including:
- Lost bills
- Unexpected expenses that the customer can't afford
- Your customers are waiting on their customers to pay them first
While it can be frustrating when a customer doesn't pay on time, it's important to remember that it may be a genuine mistake, or they might be experiencing an equally stressful situation on their end. That's why it's important to stay calm and keep your emotions in check when requesting overdue payments.
Becoming angry or confrontational is a surefire way to upset your customer and could damage your business relationship.
Keep Communication Open
Maintaining good communication with your customers at all times is necessary to sustain healthy business-customer relationships, but it's particularly important when dealing with delicate issues.
A lack of communication can build further tension during payment disputes. Make sure to call or email your customer calmly and ask what the issue is. Once you know their reasoning, keep the lines of communication open to come to a mutual resolution.
When communicating with customers regarding payments, it's also important to keep a record of email and telephone correspondence. That way, you can keep track of your agreements. Using the best invoice template online is a great way to streamline the invoicing process, as well as making it easier to track invoices as digital files.
Employ a Bookkeeper to Keep Track of Payments
Another option to help you deal with late-paying customers without damaging your preexisting relationships is to hire a bookkeeper or accountant to keep track of payments and chase outstanding funds.
Employing a bookkeeper also introduces a third party and therefore distances you from the issue. Provided you hire a trustworthy and professional accountant, you won't jeopardize your relationship with your customer.
To find a talented new bookkeeper or accountant, you don't have to spend your time sifting through profiles. You can use our sister company, Arrow Books, a reputable company delivering business transparency and organization through stellar customer service.
Incentivize Early Payments
One way to try to reduce the risk of late-paying customers and subsequent cashflow concerns is to incentivize early payments.
Some effective incentives include:
- Discounts for early payments
- Additional fees for late payments
- Customer rewards for early payments
Improve Your Customer Relationships Today
Unfortunately, having late-paying customers is common in business. However, there are some easy ways to deal with the problem without damaging your relationships, including staying calm, avoiding emotional disputes, employing a financial advisor, and keeping communication open.
Next, check out our blog on 6 Tips To Keep The Momentum Going After A Busy Period
Guest post by Gloria Martinez at womenled.org