Even if you have great relationships with your customer businesses, and they may have a good history of paying their dues, and you may have no defaulters, there are times when their cash flow might get stuck. Many companies now struggle to find their way back to smooth functioning after the COVID-19 pandemic. While it is not your pain to carry, late payments can strain your organization. Maintaining a sound management system can keep you out of situations where you have multiple overdue payments.
Here is how you can manage your overdue payments optimally-
#1- Clarify Your Payment Terms Initially:
Once you begin to provide services to a company, make sure you first agree on your payment terms. Provide them with all the information required to avoid confusion later. You can also run background checks on the company, learn about their operating managers, and see if they have had other businesses that eventually dissolved. You may also set a duration the company must pay their overdue payments. Many companies also charge reasonable debt recovery charges as their credit risk management solutions.
#2- Send Timely Invoices:
Prompt your customers to pay their debts to maintain a regular payment flow. Ensure you send timely invoices on a set date or as soon as the service is complete. Include essential details like account details, the name of the organization, and payment options, so the client is encouraged to clear the bill as soon as they receive it.
#3- Ensure Your Invoices Reach the Correct Person:
You should simplify the payment process. You may have contacts within the company, but they may not be responsible for approving payments. Get the details of the accounting personnel and copy the invoice to them so they are in the loop and you receive your payment on time.
#4- Promptly Follow-Up on Overdue Payments:
If you do not receive your payment in the duration, you asked, send an email to the contact and accounting personnel in the firm to remind them about it. The sooner you ring the alarm, the sooner you will get the payment.
#5- Keep Your Communication Channels Open:
Allow your clients to reason their late payments with you. While sending polite emails to prompt payments is recommended after a given time, it is best not to rush and threaten your customer with charging interest on their overdue invoice as Company CIR is still applicable.
#6- Call Them Up:
If your customer is still not responding to your emails, you should call them directly and ask why the payments are not being dispatched promptly.
#7- Speak to the Business Partner:
You can also encourage them to clear the bills. Point out to them that you have done nothing wrong to cause the delayed payments. Ask them to tell you the location and name of the accounting personnel responsible for paying the bills and provide evidence to support your case.
#8- If Your Customer is Unresponsive:
After talking to the business partner, you can call them and confront them with the charges. Admit your mistake and apologize if you have erred. Urge your customer to pay you within 48 hours so you do not have to charge interest and make the payment fee if any.
Are you looking for a service to manage overdue payments for your business? Check out CreditQ! CreditQ is a Business Credit Management and Information Platform that helps businesses with a valid GSTIN struggling with business defaulters by managing business credit and defaulters and providing credit information reports of companies based on market business transactions. Visit our website, call us at +91 7240000901, or email us for more information about our services.