Want to Get Paid Faster? Improve Your Relationship with Debtors

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Many business owners fear that asking for payment will make them look bad in the eyes of their clients. They are afraid that customers will think they are too impatient and that this will ultimately damage the relationship they’ve painstakingly built.

But harbouring this kind of fear is bad for business. Your clients will inevitably notice that you’re afraid to follow up on their debts and they are likely going to take advantage. Soon enough, you’ll end up with an overflowing pile of overdue invoices and a near-empty bank account.

Changing Perspectives

Avoid falling into this trap by changing the way you think about debt collection. Asking for payment is not something negative. On the contrary, it’s a natural part of doing business. You have every right to follow up on clients who haven’t paid their bills yet. After all, you did fulfil your end of the contract.

This simple change in perspective will boost your confidence and help you become more proactive. This way, when you communicate with debtors, you are taking the lead instead of being passive. This is key in establishing a relationship that gets your invoices paid quicker.

Below are some other steps you can take to improve your relationship with debtors:

1. Be upfront about your terms

When working with a new client, take the time to sit down with them and discuss your terms and conditions. Explain the details of how and when you expect to get paid. Also, inform them of any fees and actions that will be taken in case of late or non-payment. Answer any questions they might have patiently and be open to negotiating payment terms if necessary.

Doing all of this will help you avoid confusion and manage expectations. Plus, this is a great way to show your clients that you respect your business cash flow and are committed to managing it responsibly. This, in turn, will motivate clients to respect your company enough to pay you on time.

2. Personalise communications but avoid getting personal

When communicating with debtors, you need to strike a good balance between being polite and firm without being pushy or aggressive. You want clients to continue speaking with you and replying to your emails, so you need to make them feel comfortable. But not so much that they wouldn’t care about missing payments.

Although finding that perfect balance is challenging, it’s certainly not impossible. Start by personalising your letters and emails to clients. Instead of using “Dear Account Holder” or “Dear Accounts”, try using the following:

“Hello <client first name>,

I hope your day is going well.”

It goes without saying that you should stay away from confrontational language in your communications with debtors. Don’t focus on their behaviour and what they haven’t done as this will make them feel attacked and intimidated.

Instead of writing: “You’ve avoided paying your invoice for a month now…” or “You haven’t responded to our previous messages…”

Try this: “I haven’t been successful in contacting you by phone earlier this week. I look forward to speaking with today so we can discuss the payment of yououtstanding invoice and make arrangements if necessary.”

With this example, the tone is much more calm and diplomatic. Also, the focus is placed on your experiences and what you hope to accomplish. This way, you are recounting facts but without being confrontational.

It’s also a good idea to add a line in your email/letter explaining that you understand any difficulties that the client may be having and that you want to help. The goal is to show clients you’re not just interested in getting payment. You also wish to maintain your relationship with them because you value them.

3. Be honest about your shortcomings

If previous mistakes and flaws in your credit control process has resulted to many old debts, then you need to be upfront about it to your debtors. Let them know that you recognize your credit control needs to change and express that you wish to move forward with their help.

Invite your clients to provide honest feedback on why they’ve found it difficult to pay you. Consider what they have to say and use as a jumping off point for creating practical improvements to your process. Be sure to give your customers updates on your progress and thank them for their help.

This may seem like a radical move, but being honest about your shortcomings and asking for help will make your clients feel valued. This allows you to build customer loyalty. Moreover, this can lead you to a successful debt collection even during the pandemic.

For more useful tip on how to ensure your invoices get paid on time, check out this post.

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