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Getting paid is obviously part of doing business.

But that doesn’t make asking for your business's payments any less awkward in some situations.

Especially when you feel the paying party is deflecting the topic. You know the signs – avoiding emails, changing topics, and things like that.

But failing to send invoices in a timely manner or not expecting prompt payments will just make the situation more complicated and encourage bad habits from clients. Or worse, it could lead to non-payment and having to resort to hiring an outside collections agency to take over the account.

And nothing makes the relationship more awkward than having to resort to a mediary or even legal action.

Instead, focus on ways to improve your B2B collectibility so it doesn’t get to that point. Using tactics to gently, yet professionally, request payment you can get your invoices paid, while keeping your business/client relationships intact.

Here are some tips that can help.

A little prevention goes a long way

 

A little prevention goes a long way

If you can avoid ever having to make that awkward phone call to follow up on a past due invoice, great!

The first step is by bringing on clients you're confident will pay. By doing just a little bit of research ahead of time, you can possibly prevent a messy money situation in the first place. If you can avoid getting into any possible non-payment situations, the better off your business will be.

This is what you can look at:

  • Check clients’ credit history. Before extending credit to any client, do a credit check to ensure they have the means to pay you.

  • Get it in writing. If you do decide to approve a credit application, get the agreement or contract in writing. Make sure you and the other party signs it, and keep copies on file.

Make it easy

 

Handle past due invoices with care

A great way to improve your collectibility and ensure you stay in the good graces of your clients is to make things as easy as possible for them. Make it a complete no-brainer to pay your invoices on time. Here's how:

  • Send electronic invoices. Whether you use an invoicing service or send by email, sending invoices electronically ensures your invoices gets to its destination immediately. In addition, there's much less of a chance the invoice will get "lost in the mail" when you can easily track if it was sent correctly.

  • Accept multiple means of payment. Checks, cash, bank transfer, credit card, PayPal. There are many methods of payments out there, and opening your business up for more options could make it easier for your customers to pay sooner rather than later.

  • Offer an incentive for early payment. If you can afford to discount your invoices a bit, consider offering a 1-5% discount for early or advanced payments. It entices clients to stay up-to-date with their payments, and ensures you get paid on-time.

Go the extra mile

 

Go the extra mile

If you treat your clients right, they will do the same for your business. Going the extra mile and doing just a little bit extra can help get your invoices paid, and solidify your relationship with the client.

  • Pay attention to client’s payment schedules. If you know your client has to get an invoice approved before it can even go to Accounts Payable, make sure you're building that into your own schedule. Find out a little more about their process. Try to time your invoices so they will fall into the approval cycle so they can get approved and paid in a timely manner.

  • Make an advanced phone call. If you can find out the person in charge of approving your invoices, give them a call before your invoice even goes out. This heads up not only announces that your invoice is on the way, but it also keeps communication open with the client. Verify with the person that they are satisfied with the work, and discuss any issues that could hold up the payment process.

  • Build a relationship with accounts payable. Yes, there is someone else who must approve the invoice, but the Accounts Payable department is the one helps watch the budget and sends out the payments. Start your business relationship on the right foot by introducing yourself to the Accounts Payable or Accounting department.

Handle past due invoices with care

 

Handle past due invoices with care

Unfortunately, non-payments do happen. But you can still follow and get your payment, while still preserving your business's relationships with clients.

  • Be a good listener. There may be a reason your client hasn't paid. Before seeking outside help from a collections agency, give your client a call and hear their side. Perhaps they'll come right out and explain why they haven’t paid. Or you may have to read between the lines. Either way, being a good listener can give you the answers you need, without having to be too pushy.

  • Pre-qualify accounts before taking action. After you’ve followed up, pre-qualify the account before hiring help. Take each client on a case-by-case basis, and ask yourself these questions.

  • Understand the process. Debt collection is a process. Professional debt collectors do their research, collect all the necessary information and then pursue legal action if necessary. Knowing the process your account will go through, and where you are in that process, will help you preserve your relationship with the client.

  • Find a common ground. If you can find a solution that benefits both you and the delinquent client, even better! Between you and your debt collection agency, look for opportunities to quickly and painlessly remedy the situation.

  • Be patient. Debt collections can sometimes take time. Luckily, having decent relationship with the client could help speed up the process.

Collecting payments is never the most fun part of the job. But there are things you can do to help make it less messy. Follow these tips to help improve your business’s collectibility, while still preserving the relationships you have with your clients.