How To Address Late Payments In These Challenging Times
Effective Methods for Handling Late Payments
Guest Post By Chelsea Lamb
Late payments are a part of business. It’s an unfortunate fact that can have serious effects on businesses already struggling to stay afloat after the pandemic. However, businesses must understand their customers are also likely struggling with the economic impacts of the pandemic. This is why it’s vital to be compassionate but transparent when dealing with late payments. Solomon Bruce Consulting presents some tips and resources that can help you handle late payments like a seasoned, compassionate pro.
Communication Is Key
Effective communication is key to business. Always ensure your customers understand what’s expected of them or what you’re delivering. Practice active listening skills, and summarize in-person or over-the-phone conversations before ending them. It never hurts to ask if the customer has any further questions.
It’s also vital to ensure virtual communications are accurate. For example, you may need to send large PDF files to your customers that are too big for your provider’s equipment to handle. Using a PDF file compressor can help with this. Unfortunately, some compressors can damage the quality of your file content, potentially impacting the layout, spacing and images. Make sure to use a reliable compression service that maintains the integrity of your PDF.
Ensure Contracts Are Clear
Clear contracts leave no room for confusion or interpretation. Eliminating the potential for confusion can help ensure timely payments. Remember to include essential details. For example, include the dates the contract was created and signed, alongside both signing parties’ names and contact information. All contracts require an expiration date and any reason the agreement can be terminated early. Also include how and when payments need to be made and what happens if the payment is late.
Invoicing Technology Can Make the Process Easier
Invoicing doesn’t have to be complicated. Financial API bank account balance technology, such as Plaid Balance, can help make the process easier than ever. This software allows you to verify (in real-time) whether customers have the money available to pay for your products and services. By verifying the money’s there, you can increase the likelihood you get paid. The benefit for the customer is peace of mind knowing they’re unlikely to fall victim to hefty late fees.
Practice Compassion and Transparency
Even outside of pandemic-related struggles, life does happen. Your customer likely intended to pay on time, but something happened to delay their payment. Attempt to reach out and discuss with your client what’s going on. If extenuating circumstances develop for an otherwise reliable customer, you may consider forgoing or delaying late fees.
It’s also helpful to be transparent with your late payment process. Include the process in your contracts, and reach out to the customer before taking each new step. For example, if an account is due to go to collections in one week, try reaching out to the customer to see if they can make a payment to stop the process.
You Can Effectively Handle Late Payments
Late payments are a part of business, so understanding how to handle them is essential. Handling all late payment interactions with compassion and transparency is critical, especially since many of your customers may be struggling since the pandemic.
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