Thoughtful Thursdays – Do your customers think your terms are Net: NEVER?
It is a age old problem and not likely to disappear anytime soon. Let’s face it, some people like to hold onto their money for as long as they can, even if they have previously agreed to part with it.
Today’s thought is about getting paid on time.
- One of the first steps is to communicate to your Terms and Conditions of Sale to the customer. If you do not have a policy, it would be a good idea to develop one. Make a habit of letting each one of your customers and prospects. Don’t keep it a secret, they need to know.
- When an account is overdue, make the call, let the customer know that payment is overdue and request payment. Get a commitment and document the call.
- Do not continue to ship to or provide services to customers who have overdue accounts. Wouldn’t you love to have a supplier who keeps filling your orders without asking for payment?
- Set credit limits for each customer and review on a yearly basis.
- Address the situation quickly. The longer you wait, the more difficult it becomes to resolve.
- Document all communications, creating a paper trail that can be referred to if necessary.
- The reason they get will away with it is because you will allow it to happen, so don’t let it.
- If you know that payment is going to be slow, factor in the cost of money into your prices.
Having customers is good, but not if they do not pay you on time. Remember that you are not in business to finance your customers unless you are a bank and that is what you are doing if you allow them to owe you beyond the accepted terms.
Not respecting the cost of money can spell an early departure from the market place if left ignored.
What do your suppliers do if your payments are late?
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