One of the most frustrating parts about running a business of any size is when customers don’t pay on time or, pay you at all. You spent untold amounts of time securing these customers, building your reputation with them and then servicing them for long periods of time. Then one day, they fall behind and you’re not getting paid.

Maybe it was an oversight and maybe it’s more than just that. Sometimes your customers decide they didn’t like the service for whatever reason, and they stop paying. Other times, your customer might be going through a difficult period and they just need a solution to their debt problems. You’ll never know unless you begin the communication process with that customer and find out why they have not paid you.

When your customers are not paying you, there are steps to take and strategies to implement to get your customers to pay. And, there are things you don’t want to do as well. One because they won’t get you anywhere and two, it could get you in trouble.

Let’s go through a number of things NOT to do when trying to get your customers to pay their bill.

Don’t wait.

Many of the small businesses we work with are just that, a small business. But they are doing a tremendous amount of work with limited resources. In many cases, the individual responsible for the billing is also tasked with other duties in the company. As their busy season gets underway, such as a lawn care company or pool business, some of the regular duties can take a backseat. Including billing on time.

How to collect from customers that don't pay

There are two parts of “don’t wait.” The first is don’t wait to invoice, which is a common theme if you know us. But the second part is, don’t wait to follow up. You have to stay on top of your late receivables, and you have to follow up in a timely manner. You don’t have to call seven days after you invoice but a follow up statement after not being paid for 30 days is appropriate. Waiting over 90 days without doing anything about an invoice not being paid is a mistake. Follow up with a statement and a phone call.

Don’t get emotional.

Never get outwardly angry or upset about customers not paying you. This is not meant to be any excuse for it, but if you are going to be in any type of business, you are going to have customers that don’t pay on time and in some cases, don’t pay at all. It’s part of being in business. When you follow up, you or your staff still need to be as professional as possible. Yelling or raising your voice will get you nowhere. And it may even backfire on you. Be polite, tactful and diplomatic when you follow up on unpaid invoices and just might see a better result than getting upset.

Sure, you can be frustrated on the inside. We get it. But don’t show that frustration with your customer.

Don’t choose a collection agency without values

We like to think that more and more collection agencies have decided that taking a nicer approach to consumers gets them far better results than the old days of being aggressive. But like any industry, there are still companies out there doing it the old way. And you have to be careful who you choose.

If you are going to retain the services of a collection agency, you should develop a relationship with that company. Hiring a collection agency for one account will not do your business much good in the long run.

Because you may be working closely with that agency and the fact that they are representing you and your business, you should inquire about their values before signing anything. Ask them how they plan to treat your customers and how they plan to create solutions to unpaid invoices. Treating your customers with respect and tact and allowing them to create payment plans will make a big difference in the results you see from your collection agency.

Don’t break the law

Be careful not to break any state or federal laws when trying to collect on unpaid invoices. Most laws are written for third-party debt collectors and other creditors, but it is best to follow these laws if you are trying to get a customer to get caught up with their obligations to you.

In general, only call between the hours of 8:00am-9:00pm. Do not harass that consumer in any way or threaten them with any action. Do not speak with anyone other than the person responsible for the payment and do not add any fees other than those agreed upon at the time of service.

Individual states have their own laws as well such as the number of times you can contact a consumer about an unpaid bill, but it is best to check out your individual state’s website for more on debt collection laws.

If you need more assistance in creating an internal plan for getting your customers to get current in the financial obligations to your business, contact our experts today. We’ll help you improve your internal collection procedures and implement a plan for getting those late payers over to us for that added help.


Published On: July 25th, 2019Categories: Advice for Businesses

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