Thrill of the Chase: How to Get Your Customers to Pay

Thrill of the Chase: How to Get Your Customers to Pay

counting money

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Maintaining a startup can be hard enough without clients failing to pay their debts. However, it’s a scenario almost every business in the world has to deal with at one time or another. Peers and colleagues seem genuine, but they will do whatever they can to defer the balance. It’s a dog-eat-dog industry, especially when they are struggling for liquidity. Still, you are no angel and can’t afford to let them off without a form of payment. But, they may not want to pay and will make it as difficult as possible. Don’t fear because there are ways to chase down the indebted and shake them until their pockets give way.

Be Persistent

Debtors think they can ignore your calls and everything will go away. The truth is that you won’t go anywhere because the money they owe is the key to your success. Make their lives difficult from the time they enter the office to the time they leave at night. Send emails, letters and place calls until the phone comes off the hook. If you have to, knock on their doors and ask for payment or an explanation. You can even send correspondence to their home if you have their address. When people understand you won’t go away, it forces them into action.

Escalate To Court

After a while, the debtor may not have cracked, which is frustrating. Keep in mind that you have the law on your side. As long as there is a contract as evidence, the courts will rule in your favor. When that happens, they will escalate the matter to bailiffs and they will find a way to recover the debt. Going to court is expensive and time-consuming, but it’s the only way in some cases. The guilty party has to cover the costs, so it shouldn’t harm your finances.

Factoring Invoices

In simple terms, this is the process of selling an invoice to a third party who pays a flat fee upfront. The firm also receives a percentage when the account is settled. Invoice factoring sounds so good it’s a wonder that businesses don’t use it more often. At the same time, it’s important to note that there are cons, which can make the process difficult. For example, the fee may be half of the original invoice. Some money is better than no money, but don’t forget that your business has bills to pay. Plus, there’s the chance a third party won’t accept the offer if they think they won’t secure a payment.

Compromise

It’s not nice to think about, but cutting a deal might be the only option. Don’t assume that means reducing the costs as that isn’t the case necessarily. You might just agree to have the money paid back over a prolonged period. At an acceptable rate for both parties, it means you don’t have to lose out. When that isn’t an option, accepting two-thirds to half of the debt might be.

There is nothing more satisfying than collecting an overdue balance from a stubborn debtor. Hopefully these tips can help you get your customers to pay.

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