There are many difficulties which arise when you are a small business owner and it is important to have a professional approach when dealing with these issues. One such issue, which requires a lot of patience and professionalism, is interacting with customers and clients.
It is important to learn diplomatic and polite ways to deal with your customers. Outstanding payments and unpaid invoices is one of the most significant hurdles faced by small business owners. If you are facing this problem, this post might help you in organizing your business better without letting go of your customers.
Here are some basic tips and suggestions to help you interact with your customers with regard to outstanding invoices.
1. The best way to ensure that there are no outstanding invoices is by making sure your customer pays for the products/services up front. However, this is not possible when your business offers an ongoing service, where the payments are made on a monthly or project basis. In such cases, have a deadline for payments and ensure that your customers are reminded of it politely but at a regular interval.
2. Have a late payments policy. Create a contract stating that in case the customer fails to make the payments by the deadline, they will be charged interest on the payment. This will reduce the problem of outstanding invoices and the customers will oblige the rules of the company to avoid paying interest.
3. It is advisable to have a fixed process while interacting with your customers about outstanding payment. Once the sale is finalized, delegate the responsibility of payment collection to your staff. Ask them to first make a reminder call asking fo
r the payment, next have them send out a polite yet firm mail reminding the customer about the outstanding payment along with an online invoice. Even after this, if the payment is not made then it is time to send out your staff to personally collect the cheque from the customer. In rare cases, you, the owner might have to get involved in this process and have a face-to-face meeting to ensure that the payment is made.
4. Small business owners have realized that this can be quite a tiresome process and requires them to hire new staff. A new trend has emerged where the entire process is outsourced to an automated tool. Now, you can avoid the painstaking process by employing automated ways to follow up on the payments. You just have to feed in all the details of the payment along with customer details and the rest will be taken care by the tool.
Regardless of what approach you choose to interact with your customers, it is important to collect payments as soon as possible, or your business will encounter a cash flow problem. These outstanding payments need to be cleared soon to avoid financial and administrative damage to your business.