If you run a business, it’s important that your customers pay on time. If they don’t, it could mean you end up with big cash flow problems. You don’t want to end up out of pocket, but you might be unsure about what to do if a customer hasn’t paid on time. Perhaps you want to keep their business, and you’re worried they might leave if you badger them too much about payments. But there’s no point having them as a customer if they’re not going to pay. When someone is late with their payment, there are several things you can do to get them to pay up.
Firstly, you can start off by sending a reminder of the late payment. This can just be a polite nudge that your customer owes you money. They might have forgotten, or they might be having some money problems themselves and could use a little more time to pay. One thing to keep in mind is that UK businesses can claim interest on late payments. Usually the payment is legally seen as late 30 days after the agreed payment date or after you either send an invoice or provide your goods or services, whichever is later.
Request Payment Over the Phone and In Person
If sending a reminder letter or email about a late payment hasn’t got you anywhere, other communication methods can be more effective. A phone call or even a visit in person is often harder to ignore. Try calling up your customer or arranging an appointment with them so that you can remind them that they owe you money. Many people can’t brush it off so easily when you speak to them directly, and might even feel embarrassed about not having paid yet. It might even turn out that your letters or emails haven’t been reaching them.
Make It Easy for Your Customers to Pay
When payments are late, they can end up delayed further if customers feel that the steps to pay take too long. If it’s going to take them a few minutes to do, they might keep telling themselves they’ll do it later and never get around to it. Try to make it easier for them to pay by offering different payment methods so that payment is as easy as possible. For some late payments, you could even consider agreeing for them to pay in installments or perhaps offering a small discount.
Take Legal Action
When all else fails, taking legal action might be necessary. When you use a solicitor, they can first start by sending a letter before any official legal action is taken. Take a look at https://www.laneandcosolicitors.com to see how they can also help you with small claims court. With the right legal help, you can get the money that you’re owed. If the court orders it to be paid and it isn’t, they can collect it for you.
Late payments are a pain, but there are ways to collect them. Start with a gentle approach and get progressively firmer as needed.