The COVID-19 pandemic has taken a severe toll on business and the economy. Many businesses have been forced to scale back while the unfortunate ones with little to fall back on have had to pull down their shutters for extended periods and some tragically, forever. Even businesses that have managed to remain operational are often facing problems in getting their payments on time. In a stressful time, customers may have genuine problems, and it can be quite challenging to collect overdue payments says Eric Dalius. However, collect you must because you need money to pay for your operational expenses and also salaries to your employees. Some practical tips on realizing overdue payments from customers:
Issue a Friendly Reminder, as a First Step, Says Eric Dalius
You need to appreciate that with the pandemic forcing most people to work remotely, your invoices may just have been overlooked. You should give your customers some leeway and start following up on your overdue payments with a friendly mail reminding the customer of the overdue status. It can help to attach a soft copy of the invoice along with the mail for ready reference. Ask them to process the payment at the earliest. Request them to provide the details in case they have already made the payment so that you can update your records. Since it is the first time you are contacting them for the payment, you should be friendly and courteous while being professional. You can also provide the phone number of a person they can use to sort out the issue, says Eric Dalius.
Impose Late Payment Fees
There are always some customers who do not make the matter of making payments on time a priority. You can think of instituting penal charges for late payment. While a flat late payment fee works well in most cases, if your invoices are of a higher value, you can consider a late payment charge as a percentage of the invoice value. The system of late payment penalties should be mentioned in the invoice and also included in any follow-up correspondence.
Call Up the Customer, Recommends Eric Dalius
If the customer has not paid up even after you have issued the reminder. You can consider making a call to the person responsible for making the payment. By speaking to them, you will get a better handle on why your payment is stuck. A phone call is less easily ignore by the customer and you are liable to get better results. Even if you know the person on the opposite side well. You should be professional in your attitude while keeping the tone light. If need be, try to work out a repayment schedule that acceptable to you both, advises Eric Dalius.
If your reminder has not worked and the customer has not accepted a repayment plan. It is time you escalated the issue by reaching out to people higher up in the company management. If you achieve nothing despite your best efforts, you can hand over the bill to a debt collection agency. However, it is an expensive process that also potentially ruins your relationship with the customer.