Getting paid before Christmas – Day 6 Top Tip
In order to keep the cash coming in during the run up to Christmas and to help you with forecasting when payments will be received, 2 of the most common concerns I hear at this time of year I’m sharing with a tip a day. These tips shouldn’t take long to implement and will help you forecast when you will be paid before Christmas.
Today I’m focusing on your terms + 15 days outstanding.
Now 15 days may not seem like a lot, but if you give your customers 14 day terms and you’re now at day 29 after invoice date, they’ve had double the time to keep hold of your money. They have had 15 days of extra interest in their bank account that rightly should have been yours.
If you’ve been following and implementing the tips I’ve been sharing with you, then on Day 2 you would have called these customers to make sure they have received this overdue invoice.
If they raised a query with it on that call, then you should have resolved this on Day 5.
So now we need to call them to find out why they haven’t paid. Again the aim isn’t to make this call seem like a demand for money and how forceful you are on this call may depend on how much you want to continue trading with a particular customer.
Think about this, do you really want to keep trading with a customer who doubles your agreed payment terms without asking? Is this customer going to turn over a new leaf in January and start paying every invoice on time? What percentage of your sales is this customer? Can you afford to lose these sales?
Once you have the answers to the above questions, you are ready to make the call but do have these clear in your mind first and don’t waiver from your resolve.
Every company is different and every customer relationship is different, so this my guidance on how to approach this call, but do remember tailor it to your style, your relationships and your business:
Hello Bob (Contact name) how are you today, it’s Rachael Chiverton calling.
Excellent pleased to hear your well, I just wondered if now was a convenient time to have a brief chat? Excellent. So how was your weekend, didn’t you say you were going to your son’s carol service, did it go well? Fabulous glad you enjoyed it.
Bob when you told me about that during our call on date XX, you said you’d received invoice XX, which is fabulous. Have you had chance to check it yet, just it’s already 15 days overdue and you know we agreed 14 day terms fro date of invoice so it was actually due for payment on XX/XX. Can you let me know what’s holding up the payment please.
(If a query is mentioned) OK – I understand that and will get back to you later this week.
(Only just received it so not due is mentioned) – OK I understand but you were aware when you placed the order that my terms are 14 days as agreed and you had the goods/service delivered so you knew the invoice was coming. Since my terms are 14 days and I’ve already given you 29 I have to let you know that very soon interest and administration charges could be applied which will increase the amount you owe and will continue to increase daily until I receive your payment. I’m sure you understand I can’t be a bank for my customers and that’s effectively what I’ve been for 15 days to you by extending this credit.
(Not been authorised and person isn’t in) – Sure I get it you need your manager, remind me of his name again, to sign it off and I appreciate he isn’t in but you have to understand my terms are 14 days as agreed and you had the goods/service delivered so you both knew the invoice was coming. How long is he out for? I am sure if he is off until after Christmas he will have allocated someone else to make decisions on his behalf, can you tell me who that is and I’ll contact them directly to let them know the terms you agreed are 14 days and I’ve already given you 29 I have to let them know that very soon interest and administration charges could be applied which will increase the amount you owe and will continue to increase daily until I receive your payment.
I’m sure by now you get the gist of the conversation format and style. You will see in the 3 examples above I’ve never demanded money, I’ve never blamed them for not paying, I’ve merely made them aware of the consequences of not paying the outstanding invoice very soon.
So today, pick up the phone and call those older +15 days outstanding invoices and get payment confirmed payment dates from your customers. Note them in your CRM or accounting system, thank them for their assistance, time and ask them what’s going on in the office or at home. Just because you’re chasing an overdue invoice, doesn’t mean it can’t be a friendly call.