How to Get Clients to Pay Invoices

Businesses can't afford to wait too long to receive payment for invoices especially in an environment where long-time and reputable companies file for bankruptcy. Furthermore, big and powerful companies are laying-off people by the thousands.

So how do you push your clients to pay their bills? Strong arm tactics? Getting tough only puts your relationship in jeopardy. After all, it's cheaper to keep current customers happy than to find new ones. Even if your business only needs to interact with customers once, it's still important to stay on good terms. The business might talk to others about you. You want it to be good, don't you? So throw strong arm tactics out the door.

Instead, try the honest and personal approach. Have an executive or a higher up person call customers and explain to them that you need to receive payment because your business suffers, too. Explain how important they are to you and your business and you want to continue to provide them with the high quality products or services they expect. When you receive late payments, it hurts your ability to be the best you can for your customers.

If your executives and managers don't have the luxury of making all the calls, then have them do the more important and long-term clients. It might surprise and delight them to hear from someone higher up that it'll strengthen the relationship between the two businesses. These personal contacts build trust and credibility.

Another approach is to provide more payment options to customers. Perhaps, offer wire or online transfers that don't come with a surcharge that many credit card transactions do. This helps your business recoup all of its payment at the same speed as a credit card transaction. Sometimes wire transfers are a better option for the customer, so you both win.

Some companies might think they don't have to rush payment. This is where those personal calls or visits can make a difference. Be honest, direct, and warm in discussing your business' situation. Remember to show how it benefits customers when they pay on time.

Businesses have seen their late payments drop from 25% to under 10% using personal approach and offering more payment options. If you're not comfortable with this or can't make time, consider working with a financial organization that collects past due bills this on a daily basis. Businesses working with a financial organization benefit from the relationship because they spend far less time chasing payments and more time on their core business.