Non-paying customers can have a severe effect on the success of a business. It can have a negative impact on the financial capacity of the business, most especially to small businesses. It is considered as a liability for the business and the operators feel baffled and bewildered when facing these non-payers. It can cause a severe headache to you, as a business owner. That is why we are here to help you effectively deal with these non-payers.
1. Require full payment or partial payment up front for your products or services.
This is to prevent having non-payers. Requiring full or partial payment also allows you them to cover your fixed costs incurred for the product or service. You need to let your customer feels the need to pay for the product or service incurred. You will automatically be considered as a creditor when you supply a product or service with an invoice period. Therefore, it will safe is you will impose a minimum deposit to minimise the risk of non-payment.
2. Do not focus doing business in a single company.
In other words, do not put all of your eggs in one basket. You need to have a backup plan in case there might be difficulties that may arise. It is understandable that when you are a start-up business, it can be difficult to avoid exclusive dealings. If it goes wrong, your business can fall apart. You can work on step by step, company to company so that you can build your connections.
3. Be clear and understand contracts.
No matter how complex contracts are, you need to understand what’s in store in that piece of document. This is to guard yourself against unnecessary complications that may arise in the future. You also need to know the different types of contracts. It is recommended to use an engagement letter that outlines what is expected of each party over the course of the project so that you can have an overview of the contract.
4. Be honest with customers.
As a small business, every cash inflow and outflow are important because it sustains the business. Remind your customers that their business is valuable to you and may not consider them again if you do not receive the payment. This is to establish a clear understanding of the consequences whenever they will not pay.
5. Be nice to people.
Always bear in mind that they are still our customers, and we should be nice to them even when chasing for payment. You need to control yourself from behaving negatively because it will only compound the situation and they can come back to bite you. You should exhibit anger or other negative emotions in chasing non-payers. You need to be as polite as possible so that they will not get offended.
These are just some of the tips to follow in order for you deal with non-payers, the professional way. With constant reminders, they will able to pay their existing transactions.
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