7 good practices to prevent unpaid bills
You have certainly already experienced this delicate situation where, despite your numerous reminders, the payment does not arrive… Faced with non-payment, the company has a dilemma: maintain a good commercial relationship or protect its cash flow? To avoid having to choose, the strategy must first be preventive.There are loads of ways to avoid bad situations and we share today 7 simple and effective tips to apply.
1. Find out about customers
Find out about your business partners: consult the commercial register, the land registry, banks and business information agencies. With a thorough credit assessment you can estimate whether a customer or prospect is reliable or not. It is better to leave out prospects with a bad credit score, or to agree on very clear payment arrangements.
2. Make a solid bill
Providing a proper invoice should be your priority. If it contains all the necessary elements, the document can never be prejudiced against bad payers, especially if you have to go to court one day. Explicitly state due dates. The payment term indicated on an invoice is generally 30 days.
3. Offer payment installments
Working with a payment plan system is good for your client (they pay smaller amounts), and for you (it ensures a steady stream of money and prevents you from working for free if payments stop). Precise the amount of the first deposit and the payment date + the amount of subsequent payments and the date they are due. Also describe precisely the service provided in exchange for this payment. You can be creative in this regard. For example, ask for a 50% deposit, 30% upon delivery and the balance 15 days later.
4. Facilitate the payment
In order to simplify the payment of your invoices, it is imperative to provide all the necessary information for payments such as your company’s bank account number or the corresponding purchase order number. This may seem obvious, but it is rarely the case!
With Everest, you have a dedicated IBAN and can provide it to your clients to facilitate the payments. Do not forget to mention the payment information in the invoice or in the email. Indeed, without a bank account number, the customer will have difficulties paying his bill!
5. Implement late fees
If customers do not respect the payment terms, you can apply late payment penalties. To be in your full right, it will however be necessary that the term of payment is clearly indicated on the invoice and that the amount of the penalties is mentioned in your general conditions of sales, but also your invoices.
6. Sustainability Build a relationship of trust
Build friendships with your customers and suppliers. Build a relationship. Make sure they like you. These bonds will encourage them to pay you on time to keep the relationship going.
7. Send collection reminders
If no payment has been received within the terms and conditions set by your company, the best way to get an answer is to follow up with the customer.You have 3 possibilities to get in touch with the customer:
- the telephone
- by e-mail
- by mail.
If, despite several reminders, an invoice remains unpaid, you can resort to an amicable collection agency. Be clear about your payment terms when you send your offer, this will help you justify sending your reminder to the most likely customers.