BizBoost News
Volume 11, Issue 7
For distribution 9/20/21; publication 9/23/21

Making Customers Pay… You

If you grant credit to customers or take recurring credit card payments, the unexpected can happen: a customer fails to pay on time, the credit card expires, or the check bounces. What can a business owner do to spend as little time as possible on these items but get the cash collected?  Plenty.  Here are our ideas:

Re-examine your credit policy

Is there any way you can have credit customers pay up front? Perhaps you can collect a deposit to minimize your risk. Perhaps you can request final payment right before you deliver the final product.  Perhaps you can convert credit terms to a layaway situation, like they use in retail. 

The best way to speed up collections is to change your payment terms if at all possible. 

Be proactive

If the client is late with a payment, respond quickly.  Send them proactive reminders. Give them a call just before the payment is due if you have this luxury. 

If the customer pays by credit card, monitor credit card expiration dates, and send reminders to update the card before it expires. 

Make it easy and clear on your website support section how a customer can update their credit card number on file at any time. Automating this process will save you a ton of time.

Payment failures and disputes

It’s inevitable that you will experience customers whose credit card payments, ACH withdrawals, and checks fail or bounce. As a business owner, you need to have solid procedures for you or your employees to process these exceptions. 

When a credit card payment fails, make sure your shopping cart, merchant account, or gateway processor notifies you of the failure. Contact the customer right away to correct the situation. The same is true of bounced checks or failed ACH deposits. Assess any extra fees and flag the customer account if you want to place any future payment or credit restrictions on them.     

You may also have customers that report disputes to their credit card company. Respond timely to these transactions as there is always a tight deadline, and make sure you have all of the documentation you need at the time of sale if this comes up. 

Develop solid collections processes

If the payment is late, start your collections routine.  Send out friendly reminders at first; then get progressively aggressive as the payment grows later and later. 

Follow-up steps are very important. Make sure your customer is getting your notifications, and give them a call before you have to take legal steps with them. 

Finally, if necessary, turn the payment over to a collections agency who can impact the customer’s credit report and possibly collect your money.

We hope you do not have too much of this activity in your business. But if you do, being proactive is a great way to reduce it. Check to see if you have all the processes described above in place to handle collections in your business so that your cash continues to flow. 

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Our latest blog: “Making Customers Pay… You” is available now! Subscribe here: [link]

If you grant credit to customers or take recurring credit card payments, the unexpected can happen: a customer fails to pay on time, the credit card expires, or the check bounces. What can a business owner do to spend as little time as possible on these items but get the cash collected?  Plenty. Check out our list of ideas here: [link]  

Business Tip: Re-examine your credit policy to avoid problems with late payments

Is there any way you can have credit customers pay up front? Perhaps you can collect a deposit to minimize your risk or request final payment right before you deliver the final product. The best way to speed up collections is to change your payment terms if at all possible. Learn more in our latest blog article: [link]

What can a business owner do when a customer fails to pay on time? There are plenty of options for handling a situation like this. In our latest blog article, we describe four ways to spend as little time as possible on these items while still getting the cash collected: [link]

Do you have a solid collections process set up for your company? When dealing with late-paying customers, having a standard process to follow is key. Find out more about developing this process here: [link]

As a business owner, it’s inevitable that you will experience customers whose credit card payments, ACH withdrawals, and checks fail or bounce. You need to have solid procedures for you or your employees to process these exceptions.  Learn more about how to handle payment failures and disputes in our latest blog article: [link]

There are many ways to handle late payments from clients, as well as ways to prevent future problems and make the process easier for everyone. Learn four ways to handle late-paying clients here: [link]

In our latest blog article, we explain multiple processes to have in place in your business to handle collections so that your cash continues to flow. Sign up for our newsletter to get instant access: [link]