While the current state of the economy and your industry may be being pretty kind to you, this isn’t necessarily true for all of your clients. There are many companies in the world which suffer from slow-paying clients, no matter how well or poorly those buyer businesses are doing. I’m sure you have some idea of the importance of cashflow, and how late-paying clients and customers can hurt yours. Here are some helpful tips for dealing with these clients.
Have a Process and Be Proactive
While it’s a pretty common newbie’s mistake, if you’ve been running your business for a while, and don’t have a clearly defined process for pushing through payments, I don’t have a lot of sympathy for you! Even if you’re a freelancer working from your bedroom, there’s no excuse for not having a set process in place, along with policies you won’t compromise on, for dealing with any late payments. Have set time periods for how long you’ll wait before sending out the first “follow-up” message, then the second, and the points at which you’ll consider alternative solutions like invoice factoring. Chasing up clients like this can be extremely time consuming, but with set cycles in place you’ll have much less to worry about.
Contact the Client ASAP
When a new client is late on a payment for the first time, you can’t waste any time contacting them directly. I’m talking about a phone call, or even a face-to-face meeting here, not an email. Real-time conversations are so much more effective in these situations. Make sure you approach it calmly and with professionalism, asking them whether they had any specific issues with the piece of work you delivered, and whether they had any issues with your preferred payment process. Once these factors are out of the way, you need to ask them directly when the payment will be made, agreeing on a specific date. They won’t always be able to give you a date, especially if their business is in the middle of a fairly intense period. In this case, let them know that you’ll call them the day after once you’ve had a little while to investigate.
A Few Big Don’ts
I figured I’d round this off with some of the things you certainly shouldn’t do when you’re chasing up a late client. As frustrating as the situation may be, try to avoid complaining about a late-paying client to others in your professional circle. This is especially true on public social media channels. It’s highly unprofessional and has a chance of marring your future relationship with the client. Never sabotage their work or suddenly halt an ongoing piece of work you’re doing for them. Morally, this is justifiable with some of the worst clients, but such antagonism can swiftly end relationships, hurt your professional reputation, and may even have legal repercussions. Above all, be objective and professional every time you deal with late payments.
If you’ve been having trouble dealing with late-paying clients, I hope these tips have helped!