It can be very annoying when customers don’t pay. None of us want to work for free and a customer who doesn’t pay is technically a thief. However, you can’t just demand your money back by any means necessary. Customers have rights too and you need to therefore take a careful approach to getting your money back. This post explains exactly how to deal with customers that don’t pay.
Send reminders, but don’t be too pushy
Sometimes a customer will genuinely forget to pay. This is why it’s important to always start by sending a friendly late payment reminder email or text. As eager as you may be to get paid, you cannot unfortunately keep hounding customers with late payment reminders. Constantly calling customers and being aggressive could even be viewed as harassment. It’s therefore important to keep a few days between reminders (ideally a week). Many companies start with an email or text, then move to a phone call, and then send a letter. By trying lots of different methods of getting hold of them, it’s harder for a customer to claim they didn’t get your message.
Try to find out why they won’t pay
It’s important not just to demand money back, but to try and work with your customer to help them pay. To do this, find out why they cannot pay. Have they had an emergency to deal with? Are they unable to pay using a certain payment method? By understanding why they can’t pay, you can offer solutions that may help you get your money – or at least some of it. This could include offering a payment plan or allowing them to pay in cash.
Know when to get legal support
If a customer continues to fail to pay, there may come a point when you need to get professional legal support. If there are disputes over how much is due, you’ll likely want to hire a specialist solicitor firm such as RLK Solicitors that deals with litigation cases. If they’re just not responding, working with a debt collection agency could be your best bet. Yes, you will have to pay for these services – but you may decide that it’s worth it with large outstanding amounts.
Explore funding options to maintain a healthy cash flow
If you’re not getting paid, you may then find it hard to pay your bills. So that you don’t end up owing money to other people, consider looking into funding solutions to help temporarily cover costs. While you could take out a loan, invoice factoring can often be a better option for maintaining your cash flow. This is when another company takes over responsibility of collecting your invoice, while paying you the amount they owe you (although often not the full amount).
Safeguard against future late payers
To avoid a repeat situation in the future, consider what measures you may be able to put in place now to protect yourself. This could include doing credit checks on customers, sending payment reminders before payments are due, offering early payment discounts or adding late payment charges as a condition in all future contracts. You can also refuse to continue serving customers who regularly miss payments as explained here at this Direct Route guide.