Use these tips to make your customers pay on time

No businesses like when their customer refuses to pay or take time to pay for a service. But in this economy, a business needs to accept that they will come across a customer or two who will not pay on time or will go MIA. Now, a big enterprise can handle a few small debts being written-off. But a startup and a small business cannot afford this.

You can contact a third-party debt collector for international recovery or national. They can recover your debt quickly. But what methods can you as a business take to ensure that your customers pay you on time?

Let’s take a look at some tips that can encourage your customers to pay on time.

Penalty

Have a clear policy that lets the customers know that your business will have a penalty for late payers. Make sure your customers know that they will have to pay a small interest if they don’t pay the debt by the due date. If a customer has always paid on time, you can decrease the interest rate. Better yet, you can waive the penalty if they promise to pay the payment by a specific date.

Discounts

Another incentive you can offer to the customer is offering discounts up to 10% if they pay either the whole payment upfront or half.

Negotiations

It is a good practice to negotiate the price of the product with the customer so that they are encouraged to pay you at the earliest. Don’t negotiate an amount that can send you into loss, but once in a while to do that for a loyal customer strengthen your relationship.

Contracts

It is important to have a contract that is signed by both parties. It should have a language or term that is useful for solving any and all disputes. A contract is important as it discourages people from withholding any payment. If due to any reason, your client doesn’t send a check on time, you have the right to start an arbitration process which will prompt the customer to pay you back on time.

Advance payment

It is a good practice to ask your customers to pay you in advance for the services you are going to provide. They can either pay the whole price before the goods are delivered or half-price at the time of buying or half when they get the goods or before you send for delivery. This way no party is in loss and the customer has the incentive of making the payment on time.

Mixed paying methods

Employing mixed methods to get the payment on time is another thing you can do to ensure you get paid on time. Like you can ask the client to pay 50% amount at the time of purchasing the product, 25% at the time of shipping the product and the remaining amount should be paid after the delivery.

It will give flexibility to the customer, and he/she will have an opportunity to arrange for the cash.

Try these tips to encourage your customers to pay on time. Have any more comments? Let me know in the comments below.