Home – New Forums Money matters Chasing money from clients

  • This topic is empty.
Viewing 10 posts - 1 through 10 (of 10 total)
  • Author
    Posts
  • #965342
    keepsmiling
    Member
    • Total posts: 53
    Up
    0
    ::

    My customers pay me on invoice and I am having trouble with one of my customers paying. What would you suggest? I have rang them up two days in a row because the owner stated that they would pay the invoice last week but they have failed to make the payment. They also are terrible with the delivery of there brochures to me and say they will be dropping them off one and than the same day it changes on me. Would you keep a customer like that…I dont want to lose their business but if they arent paying up anyhow I dont see the point? Anyone had experiences like this? Any suggestions?

    #1011332
    Burgo
    Participant
    • Total posts: 2,104
    Up
    0
    ::

    Keepsmiling and welcome to the real world of business.
    Unfortunately we all come across these types.

    One of my teams used to clean a very large building every night. Payment was very slow at times sometimes going upto three months. Because I thought we needed this contract we continued doing the work until one night I pulled the team out discussed the problem with them and we decide it wasnt worth our time and effort. So i pulled the plug.

    Do you know what happened we immediately dropped $ 60,000.00 in turnover but do you know what happened next we picked up other contracts exceeding $ 100,000.00 and within less than three weeks we had our original contract back at a higher price.

    You dont need slow payers when you have a business to run you are relying on a thing called CASH FLOW and without a reasonably good CASH FLOW you may as well stay in bed because you aint got a business

    #1011333
    DebtCollector
    Member
    • Total posts: 40
    Up
    0
    ::

    The trick with all collection of outstanding accounts is follow up. Don’t waste your time writing a letter, get on the phone and ask very nicely where the money is. Remember to a get a commitment from them (a date) of when you will recieve the money. When that date comes around and you have not recieved the money. Ring them, always keep notes of previous conversations and commitments they have made to you and refresh their memory of the previous phone conversation you had with them….. Remember persistance alway beats resistance.
    When you should hand it over to a debt collection agent like us is:
    – If they lie to you or lose credibility.
    – When indebtedness reaches 60 days.
    – Or when 3 payment arrangements have failed.

    #1011334
    Burgo
    Participant
    • Total posts: 2,104
    Up
    0
    ::

    Now I knew there was another approach that I missed, Debt Collection worth every cent.

    #1011335
    Jeremy
    Member
    • Total posts: 23
    Up
    0
    ::

    Hi Keepsmiling!

    What is this customer worth to you really?

    You do the job for them but you have to put up with inconsistent delivery of the flyers to you, lack of payment within terms and you have to spend time chasing them for payment.

    Your time is valuable so you need to guage what a customer is actually costing you. If they waste your time, you may end up losing money or your sanity or both!

    Change your thought process – you said ‘I don’t want to lose their business’ – what you should be saying is ‘I don’t need this business as it costs me too much’.

    Get rid of the dead wood – they may come back to you for more work but you need to change the terms of trade – Cash On Delivery. Don’t give them an account because of their payment history to you.

    Always ask yourself – what is this customer costing ME?

    #1011336
    timlea50
    Member
    • Total posts: 19
    Up
    0
    ::

    I think if you are having trouble collecting your debts now – be VERY careful.

    This time of the year is the worst for cashflow for EVERYONE. If they are not paying you by the end of this month you probably won’t get paid until mid late February next year (if at all). Any old debts are not worth the trouble – a sale is not a sale until the money is in the bank.

    I would get a debt collector involved as another poster suggested – especially BEFORE December.

    I have recently completed a 12 minute interview with CBS (their Aussie interactive division) on the subject of Cashflow over the Holiday season – if you wanted to listen to the podcast you can find it at :http://blogs.bnetau.com.au/aussierules/2009/11/08/cashflow-in-the-quiet-months-btalk-australia/

    Whatever you do do something – an old debt is a cold debt!

    Good luck to all.

    Regards

    Tim Lea
    http://www.cashstream.com.au

    #1011337
    Accounts Studio
    Member
    • Total posts: 516
    Up
    0
    ::

    Most clients will pay up on presentation of a debt collectors letter. Or can you just turn up at their office and put them on the spot? Once you get payment I would then send them a letter which you can say is a general one being sent out to all clients, stating that due to disappointing payment from some clients you are now changing your payment terms to prepayment. Don’t accept any new orders from them without prior payment. If they are that bad then they have probably burnt their bridges with most other suppliers and might not have any choice but to go with pre payment.

    #1011338
    benjaminbressington
    Member
    • Total posts: 2
    Up
    0
    ::
    Ideas Book, post: 18880 wrote:
    Most clients will pay up on presentation of a debt collectors letter. Or can you just turn up at their office and put them on the spot? Once you get payment I would then send them a letter which you can say is a general one being sent out to all clients, stating that due to disappointing payment from some clients you are now changing your payment terms to prepayment. Don’t accept any new orders from them without prior payment. If they are that bad then they have probably burnt their bridges with most other suppliers and might not have any choice but to go with pre payment.

    This is correct money upfront or no work , or have a rolling retainer.

    You learn quickly when you are hungry in the the early days and clients don’t pay. You get upset and think you did something wrong when it has nothing to do with you.

    When my clients pay me up front or rolling payments they appreciate me more and respect what my team brings to the table.

    Think about your positioning and cash flow. CASH is King and get it in your pocket Make it simple for your clients to pay you. Had multiple merchant accounts that gave clients over 25 ways to pay me so there was no excuse/

    From phone, to post office, to woolworths while doing their shopping and it was great.

    #1011339
    RawMarketing
    Member
    • Total posts: 31
    Up
    0
    ::

    My current business model is built around recurring payments and I have all of my clients (on 12-month marketing packages) on a direct debit agreement where the money comes straight out of their bank account or credit card.

    (see http://www.ezidebit.com.au)

    Most businesses CAN afford to pay you, but if your not a priority to them (like a supplier is)… they’ll happily put off paying you until next month and fix up their more important ones first. If you can get them into an automatic payment agreement though, most won’t be that fussed.

    Even if it’s something like say building a website (say cost $3,000)…. Sometimes I’d rather get the business to pay 6 monthly installments of $500 from the beginning of the project. To me, the most important thing is knowing when I will get the money.

    #1011340
    beancounter
    Member
    • Total posts: 159
    Up
    0
    ::

    Often we are asked by our clients to chase up accounts

    Good guy [you] – Bad guy [us]

    The first challenge is to keep the lines of communication open. We will phone up and ask the client if everything is OK. Are they happy with the service / product etc

    Rule #1 – S/He who speaks first loses. Silence can be awkward – and it’s amazing how people will start talking to cover the silence

    If they say that everything is fine, then ask them when you can expect to be paid

    Rule #2 – S/He who speaks first loses.

    If they say “the cheque’s in the mail” etc then you can say that you are “just passing by” and say you’ll just “drop in on the way past”

    Rule #3 – S/He who speaks first loses.

    Believe it or not there can be genuine reasons for late payment – you have to find out what the real objection is then decide how to handle it

    There’s no one simple solution – debt collectors may or may not want to touch your business – gone are the days they could go round with a baseball bat and “make the client an offer they couldn’t refuse”

Viewing 10 posts - 1 through 10 (of 10 total)
  • You must be logged in to reply to this topic.