How to deal correctly with slow pay -paying users

If your business invoys consumers, you are likely to face cash flow challenges due to slow (or non -payment). Slow paying users are disappointing because they are hindering your ability to meet your expectations, fill in inventory and pay your team.

For more than 26 years, my company has invoiced more than 100 million in services and products. When I got out in 2022, we received the rate of collecting 98.7 %. Only the unpaid invoices belonged to the users who had gone out of business before we were deposited.

This success was not due to software, charming or legal risks. It has come permanently after the process of a structural collection. Whether your invoice is $ 10 or million 10 million, a discipline is essential to ensure continuous cash flow.

Related: Late payment is disability small businesses. Use these strategies to collect your money soon.

Payment pressure

Effective combinations depend on the permanent and respected application of pressure. This approach makes your company financially credible and clearly states that there are non -payment results. Bank and credit card companies successfully use similar techniques.

If consumers are close, demanding payment can be painful. This requires changing interaction in transactions from social to transactions, which can be strange for consumers, especially if they are not directly responsible for payment. Thus, the combination and customer service must be kept separate.

1. Submit the responsibilities of collecting

The first step in building a formal collection process is to assign a bookkeeper, controller, accountant or similar back-office staff to manage all collections of works-issuance of the naval, discussing payment details, and sending notes. Avoid performing the customer’s employees from performing this task, making sure that their focus is on raising positive relationships.

If consumers express invoicing frustrations from a customer facing staff, direct these complaints to your dedicated collection person. Your team will appreciate this clear separation.

Owners or founders should also remove themselves from collecting themselves, only if legal action is required. Separating these duties is organized and stronger to your business. On the contrary, begging for the payment of sellers or founders indicates weakness, which reduces the urgency of consumers’ payment.

2. Describe the payment terms clearly

Payment terms should be clear in all consumer contracts, including invoices, contracts, purchase orders and prices. Easy, clear language is essential. Consult a lawyer or finance professional to correct this language. However, some of the main elements include:

• Terms of Payment: Time frame is clearly clear, such as Net 30, which means payment of payment within 30 days. The hard margin business may need immediate payment or pre -payment.

• Non -payment results: Explain the potential penalties for late payments. For example: “The client will pay all receipts within 30 days of receipt. Failure to pay, regardless of, in turn, (a) 2 % of the outstanding balance, (B) to end the ongoing work and stop all residual services and supply until the (C) invoice is completed.”

• Payment Instructions: In detail in detail, including the names of the check recipient.

Related: Sure Ways to Pay Time to 5 Customers

3. Document your invoicing process

The next step is to document and formalize your internal invoicing procedures. Some items to add:

• Character: Clearly nominate responsibilities for sending, sending and collecting invoices. Initially, a person can handle these tasks, but with the increase in your business, the duties can be separated.

• Invoice Day: Set the date for issuing regular weekly or monthly invoice. Permanent temperament helps prevent confusion.

• Deadline before the invoice: Describe the deadline for internal data (such as advisor times or use of inventory) for invoices. Clearly explain the results for employees who fail to meet these deadline.

• Methods of Invoice: Send invoices through numerous channels (email, physical mail, text), making sure that users cannot easily claim that they have never received an invoice.

• Collection Report: Regularly maintain a collection report with outstanding invoices and their aging status. As a owner, review this report weekly with your finance team.

4. Implement the mounting pressure process

The last step is to explain and permanently explain the collection pressure process. This shows how you will enhance the urgency and formal status of communication with slow -paying users. A sample with relevant communication tasks, the process of increasing five steps is:

1. Due to the past (1-15 days late):

   • On 15 days, send an email to ask for a politely about the payment status.

   • Repeat the invoice with email.

2. Overdue (16-30 days late)

   • Weekly, send an email to the payment details, which includes all the outstanding invoices as well as an account statement showing the residual balance.

   • On 28 days, call the customer to inquire about the payment.

3. Crime (31-90 days)

   • Twice a week, email the user by describing the account. Send all outstanding invoices along with the phrase of the “account past” shown on the statement as well as the account statement.

   • Every week, call the customer and ask for payment. The customer needs to provide a check number, money and check date.

4. Account Hold (90-120 Days)

   • Weekly email, which states that the customer’s account is intact, no more business is possible, and all services and licenses are suspended until all residual balance is completed. Repeat all invoices and account statements. Display “Account on Account” on all statements and receipts.

   • Weekly call to demand payment. Payment details are required to issue any work or license.

   • On the day 100, contact the Service Delivery Manager. Inform the manager that the user’s account is hold and no more work can be done. Also, instruct the manager to suspend the user’s license within five days until the payment is received.

   • Start receiving a monthly fee in the account.

5. Legal fodder (Beyond 120 days):

   • Send final email warnings. One last last date 5-10 days.

   • Call and ask for payment, threaten legal action.

   • After the deadline, transfer the account information to a legal lawyer for litigation.

   • Contact the Service Delivery Team to cancel customer accounts and licenses.

Naturally, you would like to customize this addition to reflecting your internal tasks and used communication methods.

Related: How to Talk to users in a default correct way

Related concerns from legal fodder

Although legal action is sometimes inevitable, it is better to avoid prosecuting non -paying users. Legal action often uses more resources than its recovery. Instead, it would be better to reject the debt and stop serving for permanent criminals. The litigation should be preserved only for serious matters.

However, maintaining the process of structural combinations usually reduces the need for legalism and significantly improves your cash flow.

Effective cash flow management is important for business survival. The implementation of discipline, formal deposit ensures immediate payment and financial stability, which you focus on development rather than pursuing invoices.