How to Have Awkward Payment Conversations Without Damaging Relationships

If you’re running any type of small business, which includes medical and dental practices, you’re going to have a percentage of customers or patients, who either pay late or do not pay at all. As a result, many professionals running small businesses find it necessary to have uncomfortable payment conversations.

It just comes with the territory.

And we get it as a collection agency for small businesses and other industries. You want to maintain trust and professionalism and retain goodwill with your customers. But you must protect your cash flow. And when your customers are delaying payment, ignoring invoices or challenging what they owe you, it can create strains on the relationship and of course financial pressure on your small business.

However, you can have payment conversations that do not have to be confrontational or damage your customer relationship. Implementing the right approach and communication style can preserve those relationships while clearly articulating payment expectations.

Let’s go over a few common scenarios many small businesses face when trying to get paid. And, some advice on how to handle each situation with respect and confidence.

Your friendly customer who just forgot to pay

You’ve had a great relationship with a long-time client. Maybe you’re a landscaping or lawn care company that has been serving the family for years. They’re friendly, communicate often and support your business.

However, the invoice is now overdue.

You obviously don’t want to be pushy or risk losing this customer you have served for so many years. So many small businesses delay with the follow up. However, your cash flow will suffer if you have many customers like this.

How can you handle the friendly customer that hasn’t paid?

First, assume that it’s just an oversight or that maybe something else is going on in their lives. If they’ve historically paid on time, it’s probably just forgetfulness.

A gentle and friendly follow up by phone or email solves this issue most of the time. And many times, that friendly customer will thank you for the reminder.

Your client who always has a reason for not paying

Now you have a customer who is always late, and every time you follow up, there is an excuse.

They didn’t receive the invoice. They were away on business or vacation. They’ve been taking care of other family matters. Their hours got cut at work. Sure they may be legitimate but month after month we realize a pattern.

The challenge is that your small business is serving a long-term customer, and now you feel stuck between trying to understand their situation and possibly being taken advantage of.

You can still have empathy, acknowledge their situation but reinforce payment expectations. You can write a short script to use for customers like this that states that you understand everyone gets behind on bills every now and then but also reinforce that timely payments allow your business to maintain a level of consistent service.

Ask if they can confirm a payment date.

Restate the agreed-upon payment date.

Alternatively, you can ask whether they can make a partial payment.

Handling customers who dispute invoices.

Every small business has had the challenging customer who regularly disputes invoices. They either dispute the service or challenge details in the billing.

They might even question the timing of the invoice as it may be too soon after the service was provided.

The challenge this presents to your small business is that you risk further delays in payment, you experience frustration, and you may be forced to have an uncomfortable conversation or conflict with a customer.

How can you handle a customer that disputes your invoice?

Your best defense is to return to any documentation, estimates or written agreements you have with that customer. This will establish a baseline for what was agreed.

If they’ve disputed a payment date, back up your invoice with documentation and tactfully point that out. If necessary, take the time to walk them through with clear communication.

You must stay calm and stick to the facts. Avoid getting emotional or defensive.

Your goal is to resolve the matter quickly and get paid without further dispute.

If they refuse to pay, that’s when you need to send that account to your reputable debt collection agency. That can remove the awkward conversation you have with a long-term customer.

Handling customers who have not paid and who go silent

And then there are customers or patients, if you’re running a dental practice, that go completely silent. There’s no payments, no replies to communication, they don’t call back and they just seemingly disappear.

What happens is you feel ignored, more frustration and for many small businesses or medical or dental practices, you become unsure how far you should push the matter.

You still want to do what you can to preserve the relationship you have built with this person so it’s important to diplomatically escalate communication methodically. Use the contact information you have such as email, phone numbers and of course mailing address.

After repeated attempts, it makes sense to issue a final written notice and outline what further action your business or medical practice will take. That could result in a service interruption or the account being sent to collections.

It’s vital that your small business, dental practice or medical practice have a detailed documented debt collections process. It should outline the internal steps that dictate your decisions and timing for sending an account into collections.

Being confident and firm while still being nice is important

We believe that avoiding conversations about late payments can cause more stress than being proactive about them. Your small business or medical practice must communicate payment expectations and follow up on a clear schedule.

Communications and follow-ups can be done respectfully and should be.

When your customers or patients see that you run your organization well and take payment expectations seriously, you begin to minimize disputes.

You can also maintain confidence by partnering with a collection agency that understands your business. When all else fails, using a reputable debt collection agency can remove awkward conversations and maintain positive relationships with the people you serve.