"Protecting Your Business"

Tips & Strategies - November 2009

Late Payers - What More Should You Do?

1. Phone Late Payers Early in the Week (Monday to Wednesday) so your debtors have plenty of time to organise payment before the weekend. Call in the morning (between 9.30am and 11.30am). This way you have the best chance of contact and can try again later in the day if necessary.
2. Vary Your Means of Communicating so your debtors don't know what to expect. Try sending text messages to mobiles as well as faxes, emails, letters and phone calls.
3. Blame Someone Else for Your Collection Calls - Your accountant, solicitor, bank manager, business advisor or head office can be the "bad guy" insisting on payment immediately because "your overdraft is too high" or "your cashflow is not looking good", while you are the "good guy" who is reluctant to make the call.
4. Send Statements Out as Early in the Month as you can and consider twice monthly mailouts with the second statement printed on coloured paper so it is hard to ignore. Remember some businesses will not pay invoices until they receive a statement.
5. Attach a Copy of Your Terms & Conditions to statements and overdue invoices and highlight the payment and default clauses. Contact Ledger Guard on 07 3262 4369 if you do not have any Terms of Trade or if your document needs updating.
6. Make a Personal Visit to your customer if the outstanding amount is large enough and it is a realistic option. A visit may help you gauge how the business is going and alert you to any signs of trouble. Collect a cheque or secure a payment commitment while you eyeball your debtor. Any such agreement should be in writing or you should immediately follow up the visit with an email confirming the promise to pay.
7. Be Wary of Excuses such as "I don't have a copy of this invoice", "the cheque is in the mail", "the boss is on holiday". Very often these are delaying tactics, so deal with them promptly and take special note of these slow payers. Email or fax the 'lost' invoice immediately, then confirm receipt and ask for payment. Find out when the cheque was posted, the cheque number and the amount paid. Check when the boss is back in the office and diary a call for that day.