persuading your customers to pay

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persuading your customers to pay

Downsizer Forum Index -> Small Business Questions, Ideas and Advice

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Jb

Joined: 08 Jun 2005
Posts: 7761
Location: 91� N

Posted: Mon May 21, 07 1:15 pm Post subject: persuading your customers to pay

How do you do it?

Specifically I have a few clients who are ex colleagues now also running their own businesses. I provide them with some services and am likely to continue to do so. The problem is that that as they're just setting their businesses I know that they don't have a lot of spare capital so I don't lean on them too heavily to pay up. But on the other hand I don't want them take advantage of me. So how do you persuade your customers to pay up without being so pushy that they don't come back?

sean
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 42219
Location: North Devon

Posted: Mon May 21, 07 1:17 pm Post subject:
Start selling The Big Issue outside their office?

Rob R

Joined: 28 Oct 2004
Posts: 31902
Location: York

Posted: Mon May 21, 07 1:23 pm Post subject:

You should set out some terms of business that includes payment, the length of time doesn't need to be the same for each group of clients (some are higher risk than others) but at least if you have it down on the invoice it is upfront & clear. Some people will always take the full term or longer, they are the ones you want to discourage. Our vet issues discounts for prompt payment, others send statements when its overdue (or even when it's not

), I've added a finance charge to really late payment once before (from a 'friend'

) & you usually find the cheque was 'posted' the day before you sent the statement

lettucewoman

Joined: 26 Sep 2006
Posts: 7834
Location: Tiptoe in the Forest!!

Posted: Mon May 21, 07 1:23 pm Post subject:

you have to have a clear policy - invoices with how long you are perpared to wait - ie 30 days, 60 days etc. People should not take advantage of you because they know you -and if they are start up then they should have enough funds to purchase what they want or they shouldn't have started in the first place! They should also know how cash flow works.

I'm sorry to sound harsh - we are start up and if we purchase anything we try and pay as soon as we can because we ourselves know how important cash flow becomes - because of non payers last year we nearly went under.

if they are genuine friends or businesses they won't disappear because you ask them to pay for your services...!!

alison
Downsizer Moderator

Joined: 29 Oct 2004
Posts: 12918
Location: North Devon

Posted: Mon May 21, 07 1:24 pm Post subject:
Send them an invoice, with a "to be paid date" on it. There is no excuse for late payment, or non payment. If you want the service then jsut get on to pay for it. Bet they haven't cancelled their sky subscription, so why shouldn't you get paid too.

lettucewoman

Joined: 26 Sep 2006
Posts: 7834
Location: Tiptoe in the Forest!!

Posted: Mon May 21, 07 1:25 pm Post subject:

Rob R wrote:

), I've added a finance charge to really late payment once before (from a 'friend'

) & you usually find the cheque was 'posted' the day before you sent the statement

Snap!

chez

Joined: 13 Aug 2006
Posts: 35935
Location: The Hive of the Uberbee, Quantock Hills, Somerset

Posted: Mon May 21, 07 1:37 pm Post subject:

I find that sending out regular statements does prompt people. Our terms are normally 30 days and on the 1st of each month I try to send everyone over 20 days a statement out.

I also stick the rubric about the 'late payment of commercials debts act' on each invoice too, in case we do end up having to escalate things. We can then charge interest right from day 31, rather than having to first send another letter.

I hate being used as a bank for people - there's one particular client that seems to think that because he is a 'charidee' (it's for the kids, mate!), that means that we finance his show until he fancies coughing up. This year we got him to pay some in advance. Next year it'll be all of it.

Green Man

Joined: 23 Jul 2006
Posts: 5272
Location: Rural Scotland.

Posted: Mon May 21, 07 1:40 pm Post subject:
When I was latterly in business all new accounts were pro forma, and all credit account holders were invoiced by bank transfer. I got the occasional bounce but not many.

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