As a business owner, you will be doing all you can to attract more customers to your small business. Especially now, when many businesses are struggling because of the coronavirus pandemic, you will be stepping up your marketing efforts to win more people to your side.
In theory, your customers will save your business! However, there are cases when they can put you at a loss, such as when they are late making payments owed to you. This can be a real issue, especially when you’re dependent on that money coming in, so what should you do about it? Well, before panic sets in, here are the stages you need to go through.
- Stay Cool
Late payments are often as a result of an invoice mix-up, so don’t assume your customer is being particularly difficult. Make sure the invoice has gone out, perhaps by checking your account software, or by contacting the relevant people on your team.
If the invoice has gone out, don’t lose your cool with your customer just yet. Send them a reminder, perhaps by email, and if you haven’t heard anything within a day, give them a call. It might be that they have forgotten to pay you, so hopefully, your reminder will trigger them into action. However, if they are still slow to make the payment owed, you should consider the next stage.
- Be persistent
So, they haven’t paid you yet! This is both an annoyance and a financial issue for you, so be persistent. Get on the phone and talk with them. Find out what is causing the delay, and check for any issues. During this present time, the customer might be struggling to pay you because of the pandemic, in which case, you might need to negotiate. The same applies if there are any other financial issues on their end.
If the customer is struggling, you might want to accept part payment or offer them a grace period until they can raise the funds needed. By talking through such options with them, you will put them at ease, and you won’t risk alienating and losing your customer.
Of course, the customer might be unreachable, or they might refuse to pay. So, what should you do next?
- Take action
If you know the contact details of the customer, you should consider legal action. A warning letter from your solicitor could be all it takes to prompt them into action, but if not, you could consider taking them to the Small Claims Court.
You might also consider the services of debt buyers, as they will do what it takes to get back money owed. They will also know how to find those customers who have disappeared off your radar.
By taking these steps, you should get your money back eventually, or a significant proportion of it anyway. To alleviate the risk of such issues happening again, you might then institute stricter payment policies or have a system where you require payment upfront or cash on delivery of your services. This should ease any future financial worries.