Some students just need a nudge. Others need a detailed plan.
April 1, 2016
Success Magazine: What Achievers Read – September 2015 Issue
Anthony Iannarino, Business Owner & Speaker
Q: I’m selling plenty, but customers are slow to pay my invoices. What can I do to receive the money faster?
—Farooqbhatt Sopore, via email
A: As Farooqbhatt’s coach, I’ll be directive, supplying him with a strategy and specific language to use with customers—motivating them without alienating them. (If he already had the strategy and the words, he wouldn’t be waiting on payment, right?)
Here’s a general, but adjustable, plan for getting paid promptly:
First, quick payment is easier if you establish terms at the beginning of the relationship. The best way to do this is to say, “The prices that I am quoting here are based on our invoice being paid upon receipt. That’s how I am able to deliver this value to you at this price. You can pay on receipt, right?” Maybe your terms are 30 or 45 days. It doesn’t matter. If there is going to be a problem, you want to know now so you can discuss it and maybe negotiate. Can you make this change and start doing this with new customers right now? Excellent!
Now let’s deal with your existing customers who have unpaid invoices. You will need to call them and ask for payment. These relationships are precious, so you want to honor them and still receive the money owed. The best way to do this is to call and directly ask to be paid. You say something like, “Tom, our invoices for July haven’t been paid. I know you didn’t mean to overlook those payments. But I really need to be paid so I can continue delivering the value you expect from me. Can I pick up a check this afternoon?”
Now be very quiet. Don’t speak. You’ve said this in a way that protects Tom’s ego by suggesting he overlooked this instead of being adversarial. Tom will say yes or will negotiate a date for you to pick up your check.
When you pick up your payment, you want to have that conversation about establishing terms. Because you already are serving this customer, you say, “Tom, I’m sorry I didn’t explain our terms when we first started working together. To provide the value that I deliver for you, I base my pricing on payment terms of net 30. Can you get my business set up in your system with those payment terms?”
Many companies pay the vendors who ask for—or demand—payment first. They stretch everybody else. You need to be one who asks for payment.
You are asking for your own money. You have every right to ask for it, and no one has the right to withhold it unless you haven’t delivered the value you promised. Be polite. Be professional. And remember that part of being professional is asking for payment so you can run your business well and continue to serve your customers.
One more note: If you aren’t being paid because your customer doesn’t have the money, you have a different problem. In this case, you may have to re-evaluate the whole relationship. Sometimes a customer has a short-term cash-flow problem, so it makes sense to work out a payment schedule and tie your continuing service to being paid promptly. But if the customer can’t or won’t pay, you may have to take legal action or hire a collection firm.
For the full article, click here.