PlusOne – Marketing Musings

A great bit of advise from over at A Marketing Blog by Marketing Journal called Isn’t it good if your customers pay on time?

I repeat it here. One aspect I think needs adding is that people who don’t pay, because they insist on paying by THEIR accounting cycles. I have one client who paid 60 days from end of month.

I now insist on 100% up front – and this is a national company who can be quite lucrative, but I am not a bank that offers money on the short term lending market, interest free……

Now, here what I saw at A Marketing Blog:

As stated by the Australian credit management, there are typically 3 reasons why customers don’t pay.

• The customer can’t pay
• The debt is disputed
• The customer had no intention of paying

When you have customers like them, it will affect your cash flow and as we all know, cash flow is king. So what steps can you take to speed up the collection of your money and not to have bad paying customers?

1. First rule: Get payment first before you deliver. Get at least a portion or 50% up front before you start work.
2. Send out invoices/bills on time. The earlier you send it out, the sooner you can collect your money.
3. Monitor payments/receivables daily. Keep a close eye of this everyday; make sure you know which payments are overdue.
4. As soon as the invoices are overdue (our term is Net 7, which means it is overdue after 7 days), immediately send out reminders. The longer the invoice is not paid, the harder it is to get your money.
5. Call your customers or their accounts department to chase up the payment. The faster you get your money, the better your cash flow.
6. Extend customer payment if they can’t pay but you need them to commit to a formal payment plan.
7. As soon as you have identified a bad customer, stop sales to them and stop servicing them until they have paid or at least make a commitment to pay.
8. Get the professionals to collect your money. When it is way overdue and the customer is not paying, it is time to hire a debt collection agency.

What are your views?? Share them via comments.

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