Navigate Late Payments While Maintaining Customer Relationships
Every business must face potentially negative customer interactions at some point, whether it’s due to the client’s error or their own. One of the most difficult interactions to navigate, however, is handling late payments. It’s important to strategize and lay out a plan for customer service while also ensuring that there are multiple options for your customers to pay on time. This includes accepting different types of payments, which is easy to do with tech such as simple payment processing software.
You might even incentivize early and on-time payments by offering discounts or bonuses, or find a way to make your website or payment system more accessible. Today, we take a look at some ways you can maintain your relationship with customers while decreasing late payments.
Make it easy to pay
The easier it is for customers to pay their bills and track invoices, the less you’ll have to handle late payments and follow-up calls or emails. If possible, give your clients multiple options for making payments, including online, in-person, or over the phone. Utilize technology that will allow for invoice tracking and a payment system that will accept various types, from credit cards to money transfer services like PayPal. If you can make paying bills less frustrating for your customers, they’ll be more likely to get them paid on time.
Be timely and courteous
When it comes to invoices, it’s important to be proactive and make sure your company is doing its part. If a customer doesn’t get an invoice until a few days before it’s due, the likelihood that they’ll make a late payment or skip a payment altogether increases. Automate your invoices if possible, or, barring that, make sure they are received by the customer in a timely manner so they have plenty of time to make payment arrangements. You can also work with your customers to figure out a payment schedule that works for them when it comes to recurring bills; many people prefer a specific time of the month for larger bills, when they know they’ll have more cash flow.
Create branded invoices
Branded invoices help to create a professional image for your business and can remind customers of your company long after they've made a purchase. They can also help to build trust and credibility, both of which are essential for attracting new customers and maintaining relationships with existing ones. Your best bet is to use an online invoice maker to create a branded invoice. Choose a template and then add your logo, slogan, and billing information.
Request a deposit
For those larger bills and invoices, consider requesting a deposit up front. This is beneficial for both you and the customer, as it helps to ensure that they’ll pay the remainder while allowing them to break up the payment rather than laying out a large sum up front. If they prefer to pay the entire bill at once, consider offering a small reward, such as a discount or coupon for their next purchase. These little incentives can really be helpful in getting customers to pay on time, as well, so they’re also useful for those who take care of their bills early. You can also create a loyalty program that gives a sense of inclusiveness, which makes it easier for them to remember payments.
Utilize email
Many businesses utilize email marketing, but email can be useful in other ways, such as sending out coupons or rewards. Sending an automated reminder for bill payments is a great way to go, too, since it can feel less like a personal request for money and more like a regular aspect of doing business. Frequent communication with customers keeps your business’s name in the front of their mind and offers an easy way for them to contact you with questions or concerns, so it’s a good idea to enable a “reply” function on your emails.
Implement a fee, but be flexible
Sometimes, it’s necessary for a business to implement a charge for late payments in order to drive home the fact that a customer hasn’t held up their end of the bargain. Every business is different when it comes to the rules surrounding late fees, so think carefully about how you can be flexible and maintain your business relationships while preventing habitual payment tardiness. For long-time customers, you might consider waiving the fee after one late payment to show appreciation for their loyalty. For customers who have extenuating circumstances, try to be accommodating and find a solution that works for you both, such as a due date extension or a payment plan.
Be clear about your expectations
As with any aspect of business, it’s imperative that customer contracts clearly communicate your expectations when it comes to making payments. Your customers should have a copy of your payment terms and conditions, which should be concise and easy to read. If you’ve worked out a payment plan for them, the details need to be spelled out in writing so there’s no confusion about the amount owed, the due date, or the length of the installment plan. If you’re going to implement a late fee, this should also be included in the terms.
Stay organized with online tools
It’s important to stay organized when it comes to paperwork such as payment terms, invoice copies, and late fee notices. These documents can quickly pile up and take up valuable space on your computer or in physical files, making it difficult to find what you need when you need it. By using a PDF compress tool, you can reduce the size of these documents without compromising their quality or content. Additionally, compressing your PDFs can make them easier to securely share with others via email or other digital platforms. This is especially important for businesses that frequently exchange invoices and payment terms with clients or suppliers.
Stay secure
Cyber security is another important aspect of business that affects both you and your customers. If they don’t feel safe when making payments to your company, they may balk at continuing to do business with you. Talk to your employees about keeping passwords secure and how they can spot email scams. Only give essential workers access to customer information. Use a payment system that offers protection against hackers and change passwords often. These are simple ways to make a big impact when it comes to cyber security.
Maintaining your relationships with customers is a high priority, but it can be a fine line to walk when money is involved. Balancing flexibility with clear expectations can be tricky, but by laying out a plan with your employees, you can provide the excellent service you’re known for while ensuring each bill is paid on time.
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