Customers Not Paying Their Bills? Here’s What To Do
You wouldn’t have a business without customers. By purchasing your products and services, they keep the money flowing, which helps you to cover your bills, profit, and grow. At least, that’s how it works in theory.
Due to the importance of customers, it’s likely you give them a lot of leeway. You could overlook and accept a negative review, for instance, or you might cover their specific demands even though you are going out of the way to do so. However, there is one aspect where you simply can’t look the other way: when a customer doesn’t pay their bills.
If your customers are not handing over the money you requested, not all hope is lost. Here’s what you should do.
1. Send Out A Reminder
In most cases, customers are not vindictive. They might have simply made an honest mistake and forgotten to pay their bill. This is why sending them a gentle reminder could be just the tonic to this issue you’re facing.
When a customer sees their bill is past due, they will often take the necessary steps to pay this off as soon as possible. You may also decide to include an updated invoice with this reminder, as this stops the possible excuse they lost their initial bill.
2. Ask The Client About Reasons For Not Paying.
While this might be a little personal, it can help you extract your money from customers. Or at least it will give you an insight into why your client isn’t paying. You can ask them questions about how satisfactory they found your work, what are their economic complexities or if there is something else regarding the payment that’s bothering them.
After knowing the reason to refuse payment, you might come to a resolution with your customer. Always remember that customers are humans too, and there might be a subtle logic behind their unable to pay you.
3. Be Firmer In Your Approach.
Are customers ignoring your calls and emails requesting payment? In this case, you will need to switch that gentle approach for a firmer tone in your messaging. Hopefully, they will get the message is serious – and they need to take action straight away.
This is easier to do when you’re a service provider. This is because you can give them an ultimatum, a specific deadline where, if they fail to pay their bill, they will no longer receive your services.
4. Try Escalating The Situation.
Experts are of the opinion that it’s always better to request your clients for a payment timeline and keep following them up until you receive your payment. If urgent, resend the original contract of your business to them and give them a hint that you might escalate the scenario if the payment remains due for a prolonged time.
In order to give your customer an idea of doing business, send them a demand-payment letter. It is basically a formal letter outlining the debt that they owe you and describes the consequences if the payment is not made in the said amount of time.
5. Make Use Of Invoice Finance.
One of the problems with a customer that’s unwilling to pay is that it can have serious ramifications on your cash flow. This is where working with a brokerage company like fundinvoice.co.uk and benefitting from an invoice finance service can be a lifesaver for your business.
With invoice finance, you are able to take your unpaid sales invoices and receive funding for them immediately. There’s no waiting until a customer decides to settle their bills. A lender will provide funding against these invoices, supplying you with money so you can instantly improve your cash flow.
6. Use A Debt Collection Service.
When you have exhausted all other options, it might be time to go down the debt collection service route. A debt collector is a specialist in recovering payments, where they utilize proven tactics and a persistent approach to get customers to finally settle their bills.
However, the debt collection alternative is only possible when it has been 90 days after your due. The service includes handling a follow-up with the consumer asking them to pay individually with the help of tried-and-true tactics.
7. Is It Possible To Take Legal Actions Against Non-Payers?
If your debt is adequately significant, it is a viable option to take your client to smaller claim courts or ask an attorney to interfere. While considering a lawsuit, these experts conduct an honest cost analysis. However, if the amount is less, you must take a lesson from this incident and keep moving with your eyes and ears open. A greater part of this debate is that the amount of money does not matter, a debt ought to be paid irrespective of excuses.
Nothing comes easy, and certainly not the services provided by a flourishing business. There are numerous consumers that take you and your business for granted. In such cases, it is always recommended to take legal action and give a lesson to others as well. You might seek help from your stakeholders as well.
Coming back to the question, it is always possible to sue a customer that isn’t willing to pay. But since the process is lengthy and includes a share of embarrassment, our tip will be to first work on the above steps. In general cases, these steps are adequate in bringing out the payment from a client’s pocket.
It is frustrating when a customer doesn’t pay their bills. However, they don’t hold all the power. While inconvenient to chase up customers, this ensures you don’t simply accept the situation. The result: you get paid quicker and ensure better cash flow for your business.
Offering products and services come with a price, and if a customer isn’t willing to pay that, it de-motivates owners to carry the business with new people. We sincerely hope this article sheds light on the ways that will help you to get your desired payment back.