1 December 2017
What exactly do you need to know about payment reminders? Let’s straighten it out for you:
You do your work and get paid for it. Sadly, that second part can sometimes drag its heels. Customers seem to take your work for granted, but don't take quite the same attitude to timely payment. What's the best way to approach late payments? It's simple: you send reminders. We'll tell you here about the how, what and why.
Why is it important to your company?
Payment arrears can get you yourself into difficulties. So there's no reason why you should pretend that forgotten invoices haven't happened. Also, in many cases it's simply a matter of negligence. Forgetfulness is human, but of course you're waiting for your revenue.
The best thing to do in such cases is to remind your customer politely that the payment deadline for one or more invoices is past. And ask if they can be paid promptly.
Don't forget that you ideally want to keep your business cash flow as stable as possible. That's another reason why it's best to ensure that your customers pay on time. Otherwise, it's impossible to track when you can expect your revenue and you're at risk of being saddled with negative cash flow.
Good agreements make good friends
Your customer knows what to expect of you: why shouldn't it work the other way round? Discuss frankly and honestly up front how you see the billing. Something you definitely have to agree on is the payment date. It's normally 30 days. Once this period expires, send a payment reminder.
In addition, you can agree on a few rules about late payments. For example, you can charge administrative costs if your customer pays more than 15 days late. You should always state this in your general terms and conditions, which you always attach when you send a quote or purchase order. You won't work together unless the customer agrees to these and puts his signature at the bottom. That way, everything is clearly down on paper and you're fully covered. A bold move if you have a small business, perhaps, but it's a very useful way to build good customer relations.
Make it easier for yourself and your customers
We said it before: to err is human. Your customer forgets to pay, or you completely lose track of your own payment deadline. With a tool like ING Invoice Solutions, you take that forgetfulness out of the equation. This tool allows you to fully automate the dispatch and management of your quotes.
Is your customer behind with a payment? The tool makes it easier for you to send a personalised reminder. This means you give your customers the feeling that you know them and know how to communicate with them.
ING Invoice Solutions gives a useful overview of how many days remain before the payment deadline is reached for every customer. You know right away which ones always pay late. You can also compare your income and expenditure in the tool and examine the role that defaulters may play.