Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How To Get Your Clients To Pay Outstanding Debts

Companies / Debt & Loans Feb 10, 2021 - 08:34 AM GMT

By: Sumeet_Manhas

Companies

There is nothing more frustrating for a business to have to chase up outstanding payments.

It doesn't matter whether you are a large business with an invoicing department or a freelancer offering up your services. Clients that take forever to pay can be a severe hindrance to your cash flow.

While some clients may have a good reason for not paying on time, others are merely trying to get out of paying you what they owe, or they are not in a financial position to pay you right away. 


Whatever the reason, you want to collect outstanding payments from a client as soon as possible.

What Is the Difference Between Unpaid and Overdue Invoices

Despite their similarity, understanding the differences between the two will help you decide how to act.

Unpaid

Unpaid invoices are those that have been sent out but not paid yet. It doesn't mean the client won't pay, but he hasn't yet paid.

Overdue

This is a serious one where the invoice due date passed, and the client still hasn't paid.

How Do You Deal With A Customer Who Refuses To Pay?

If your client refuses to pay you, you have to be able to stand your ground. 

There are several methods to collect a debt, but they commonly necessitate much time, effort, and money.

The best way to collect payment from clients is to ask for it. You might think that asking for money is more complicated than you thought, but it doesn't have to be.  

It may help you follow some tips before getting down to the serious part of collecting what you are owed.

Clearly State Your Terms

When you make a sale, whether it's a per-hour contract or a flat fee, you need to be clear on the terms of the agreement, and you also need to be clear on the terms of payment.  

The client may offer to pay you with each milestone or offer to pay you at the end of the project.  

If they don't have the money on hand, they will likely offer an alternative payment method.

Always Follow Up

You will need to follow up with clients consistently. This can be achieved by sending a client an email each month or every week. 

Many businesses become concerned when their first email goes unanswered. This is because we sometimes forget that people have hectic lives. If you don't get a response right away, it doesn't mean your client will not pay.

By using special software like Payt, you can set up automated follow-up emails with the text of your choice.

Naturally, it's best to start friendly rather than create a conflict right away, but you can gradually become tougher the more prolonged the unpaid invoice goes unpaid.

If you have not been paid after a week, sending a polite follow-up email may help. 

Attaching the invoice may be helpful when sending this email.

Research Your Client

You will never know what type of person you will be working for until you do some research beforehand. 

By researching your clients, you'll be able to be sure they're who they claim they are and that they can pay you for any work you do for them.

One of the ways to determine if they are trustworthy is to perform a credit score. Many companies offer credit scores, and many are very straightforward to conduct.

Check your jurisdiction to see whether it is legal for you to conduct a check without their consent. There are some countries with stricter privacy laws surrounding this than others.

Send Your Invoice As Soon As Possible

Clients tend to be very busy. They will be more inclined to pay you if you send them invoices promptly. 

Don't give your clients any room to stall on payment. By sending an invoice several days after the agreed completion, you leave the door open for them to claim more time.

While it's easy to get caught up looking for new clients, you must remember to invoice completed work immediately.

Provide Additional Payment Options

The more comfortable you make it to pay, the more likely your clients will do so. Offering them a variety of convenient options makes you look professional, but in the end, your client will feel obligated to pay up what they owe.

You can offer direct bank transfer or even online payment options, depending on the job's size.

Establish a Late Payment Fee

This ties into the first point, which is to define your terms before starting any job. By ensuring that your clients are aware of the late payment fee, you already set expectations and ensure that they will subconsciously pay on time.

Once they sign the contract, you will then be able to comfortably take any grievance to a small claims court in the instance that they don't want to pay.

However, the main reason for including this clause will be to ensure they pay on time, so you don't have to worry about going to court. 

You can also offer a 30-day grace period as long as the client pays within 30 days; any late fees will be waived. This makes you appear more professional and hopefully won't scare your client away.

Establish a Payment Plan

Sometimes a client can afford to pay but is unable to due to unforeseen circumstances. If this is the case, demanding letters and threats will prove to be ineffective.

You can get a separate contract to include a payment plan of an agreed-upon amount in this situation.

You should preserve your original contract so that you have evidence if you end up in court.

Stay In Touch Personally With Your Customers

Nobody wants to wake up to an angry and demanding email. Your client may have forgotten or had other things going on.

By staying in close contact, you will be able to learn about the issues they face. Communicate with them and understand their concerns to ensure you get paid.

This doesn't mean that you must take on their problems, but it's helpful to keep in touch with them.

Communicate with your clients to find out the reason for their late payments. Some clients may not realize the full severity of their situation until they talk to you. 

You should prepare for this by setting up an initial meeting with your client to discuss the late payments and create a plan for resolving them. 

You might want to reach out to your small business association or your local chamber of commerce for help and advice if you need it.

Contact A Collection Agency

If all else fails, you can ask for the services of a debt collection agency that specializes in recovering unpaid invoices.

This may not be an option for smaller invoices or freelancers, but for large amounts, it might be your only option.

Summary

Many reasons exist for clients not paying on time, and many of them can be avoided. However, they may not realize that failing to pay can cause severe problems in the future. 

If your client fails to pay on time, you will not only be responsible for the money you borrowed; you will also be liable for any subcontractors who have not been paid, compounding an already bad situation.

By Sumeet Manhas

© 2021 Copyright Sumeet Manhas - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in