How To Ensure Timely Customer Payments
By Max Kleynburd
From the "You're the Boss" Section of The New York Times
This is the age-old question that makes or breaks many a small business ? how to get paid without losing an account or becoming the bad guy.
Let's be honest -- you can't operate your business without a steady and reliable cash flow. Timely payments from your customers is the key ingredient for success. With that in mind, late customer payments is a "luxury" you simply can't afford.
The key is to forge a client relationship that is based on mutual respect. In a polite and respectful manner you have to make it clear to your customers that your business operates on the pay to play philosophy. Reassure your clients that although you understand the difficulties they may be facing, thirty days means thirty days. And remember -- always get a signature. Always keep a paper trail.
Begin by putting in place a firm company-wide policy on collecting receivables. Print that policy on your invoices and statements - you can even incorporate a system of late charges to encourage timely payments. Your customers will appreciate your direct and honest manner.
It's also important to let your clients know that as much as you cherish their relationship and their trust in your products or services -- rules are rules. Invoices are due when they're due and even you aren't above the rules.
Polite but firm reinforcement is your key.