Question

What are different methods to encourage customers/clients to pay their bills timely or even quicker?

How can we use receivables to get our hands on cash before we collect the receivable?

What do you do if a customer won't pay their amount due?

Answer 1

1.different methods to encourage customers/clients to pay their bills timely or even quicker :

a.maintain good client relationship : its so important. Please maintain friendly approach to your customers and let them know they are valued to our company.

b.must invoice on time : try to do all matters punctual.if there is any delay in sending email,delivering a late invoice or other late correspondence may shows that urgency and timeliness do not matter to your company. So provide all correctly.

c. Use cloud based service: alert yourself during your billing time. Thats why do not forgot to invoice for them. And can send automated reminders to your customers. When its comes the final payment day,this service allow for pay online which are easy to your clients.

d.switch to retainer based model : your client pays same amount in every month for setting service you offered. They can link their bank account to your company's account. Now the payment is so simple.

e. Include the payment terms in the contract along with late fees : mention all detailed payment conditions in your contract at the starting time of your relationship. Written agreement will give better value than oral. And client can know all at first.

f.ask them for upfronts payments : customers hesitant to pay you 100 percent upfront because they needs to view complete project before they do. Its also better option for quick collection.

g.do not deliver work until you are paid by them : finish your work on time. Let your client inform that its ready.then client prove its alright. And need them the work you have done.so they will give timely payment. And they will get the work when its due.

h. Stick to a payment schedule : if you want regular payment from clents,you must provide invoice regularly. May you can take 30 or 21 days schedule for it. But 60 days are over. Its not much better.

i. Offer discounts more :when they provide timely payment, offer cash discount to them for retaining good relation with them.

j. Offer a payment plan : if the clients are late to pay,offer a plan to them. Firstly add small percent of their overdue bill on subsequent ones. Still they are struggles to pay,use the below method,that is bill more often.

k. Bill more often : please bill every two weeks instead of 30 to 21 days billing. And must inform it to your client. Bulk payment is critical to customers.but,when there is bill more often its beneficial to them to give easily.

2.How can we use receivables to get our hands on cash before we collect the receivable?

a.as invoice factoring : this is the way account receivables are factoring. Its a good source for raising cash for the business. Here, you are selling your receivables to a factor. The factor advances majority of that invoice to you quickly. And he will collect it. They will pay the amount after lessing their factoring charge.

b.as bill discounting : it is a way to ensure funds to our business from future payables. Its the invoice discounting. Its meant that an advance selling of the bill to one intermediary , may be bank before its due for payment date.

3.What do you do if a customer won't pay their amount due?

a.research your customer : please research about their background. And identify if there is any other complaints as like this in his history.

b.discuss all detalis before sign the contract with them : its must to discuss all payment details with clients while sign the contract. It would be a written proof to the company.

c.sent invoice timely: may be your untimely invoice , be a reason to pay for the invoice

d.stop working: if they lag to pay upfront payments,then stop your work until you will get the amount.

e.charge late fees:charge it very slowly atleast 20 days after invoice goes unpaid .

f.seek legal action : its expensive and time consuming. Eventhough if you have to get much amount still, you can approach court. You can sue customers to get back your money within few days.

g.follow up your client regularly : its too boring way.inform every time about the payment,late pay fees..etc. thus approach the customers very kindness.

h.get you some help from any online agencies or involve your attorney . They will refer a agency whose legal dept. Will draft a letter seeking payment to collect the unpaid amount .

I.may you can offer a deduction for payment .inform your customers as to pay only 3/4 of actual payment. Balance is not pay for our company. But its only rare case. Not anyone give this offer. Its possible only for high financial background companies.

Hope you understand all.