Many Entrepreneurs I speak to have a COMMON issue which plagues them, an OUTSTANDING list of DEBTORS that seem impossible to manage.
It’s not only affecting their CASH FLOW but is causing them sleepless nights and often their HEALTH.
They will GET away with WHAT they can if you LET them.
Your Customers are most likely SIMILAR to you, they are running a business too and need to control their cash flow. They will often do this by taking the EASIEST path, often at the EXPENSE of the smaller companies they deal with. But it doesn’t have to be THIS way if you take some simple steps to EDUCATE your customer into a BEHAVIOUR that you are happy with.
- Set the ground rules EARLY in your relationship. Let them clearly know what your payment terms are and that to make this relationship work, they will need to adhere.
- Be CONSISTENT in your invoicing. If thats weekly, fortnightly or monthly, ensure it goes out on the SAME frequency so your Customer gets accustomed to getting it at the same time.
- Send FREQUENT statements highlighting any outstanding amounts.
- Have a PERSONAL relationship with the Accounts Payable person and their boss and speak to them regularly.
- Communicate with them frequently and personally THANK them each time they pay on time.
FREQUENCY, CONSISTENCY and COMMUNICATION are the key to Educating your Customer into paying you on time.