• Fair Capital

How to get clients to pay overdue bills?

If you find yourself in the situation where a consumer has stopped paying, it is important to take action immediately. The first step is to send a written notice demanding payment. This notice should state the amount owed, the date by which payment must be made, and what will happen if payment is not received.



 

KEY TAKEAWAYS

 

DON'T JUMP THE BAR



Use "LAER" to get your clients to pay their invoices.

Listen - Acknowledge - Evaluate - Resolve


Listen. Listening is the first step to resolving any unpaid balance. If you truly listen, you can resolve the vast majority of overdue receivables quickly.

Acknowledgement. Nobody likes to feel like a fool or unworthy, including debtors. When a debtor feels that you really understand him or her, he or she will usually open their minds to the perspective of the creditor.

No matter what the situation, every human being should be respected, even if their viewpoint and perspective are unreasonable. It is important for us to train our collectors to put themselves in the debtor's shoes, in order to fully understand the debtor's perspective and reflect that back to the debtor.

Evaluate. What really bothers them, and what can I do to help. Is there an underlying dispute, a lack of understanding, a misunderstanding or a cash issue?

Resolve. A true resolution is one in which all parties are pleased with the outcome, and this is what we strive to achieve.



Initial stage-Soft approach

Let's face it; some customers will stop responding to your payment request just because they are struggling financially. Yet, they are too ashamed to admit it. This is why we need to be cautious; instead of letting your debtor know how angry you are, which may be very tempting, consider taking the "speak softly" approach. When a customer has difficulty paying an invoice, you should encourage them to contact you so that you can set up a flexible payment plan that will help them.


Many things can happen to your customers. Maybe they got sick, or they suddenly found themselves dealing with a personal problem that derailed their ability to pay you promptly. As a business owner, you can make a lot more headway in these situations if you show a little empathy and make accommodations for your clients when possible.

After all, it isn't just great customer service; it's about being compassionate.




Test your client's attention

Test your client's attention by creating a formal demand letter with a payment deadline; since it's a formal letter, customers aren't likely to take it personally. If your client intends to pay, they will take out their credit card or checkbook and pay.

Pay attention to Wording

It will help if you come across as polite and professional while wording your invoice. Friendly phrases like 'Please make the payment on time', 'Kindly pay your invoice within X days' and 'Thank you for choosing our service' can increase a payment probability by more than 5%.