There can be many reasons why customers can’t or won’t pay your service or product fees. Maybe they’re genuinely in the midst of hard times, or they think they can get away with not paying. Or perhaps a late payment is simply the result of laziness. While a loyal customer who usually pays on time may demand a bit of empathy if they pay late once, chronic offenders who are always late or have large outstanding payments due require a different approach. If you haven’t already developed a sturdy debt recovery or prevention policy for your business, it’s important to do this. After all, how your business conducts itself in these kinds of situations will contribute to its reputation. Aim for actions that are assertive, consistent and professional. If you still can’t get your money out of some clients, it may be necessary to hire debt recovery lawyers in Melbourne. Read on to learn four helpful tips relating to debt recovery.
Lay Down the Law
If customers know exactly what your policies are because you’ve been very clear in communicating them, it’s less likely they won’t pay. If you act flaky about payment amounts and dates, then they’re more likely to as well. Decide what your terms are and enforce them. Apply a late fee to any late payments. Sometimes it’s just the idea of there being a negative consequence to a late payment that will jog a client’s memory to pay on time. Conversely, if you don’t like the idea of late fees, you can do things the other way and offer discounts or bonuses for payments that are early or on-time. At any rate, laying down the law means there will be no slippery grey area for customers to hide in. Any lack of payment will be a deliberate action on their part that could be grounds for getting debt recovery lawyers in Melbourne involved.
Get Proactive & Communicate
Don’t let late payments languish. Studies show that the longer a bill is unpaid, the less chance there is that it will be recovered. This means that you need to be proactive and get in contact with your client as soon as a payment is overdue. You can do this in a variety of ways, including email, phone or via an automatic reminder from your accounting software. It’s essential that you communicate with your customers as soon as possible to find out what the reason is for the lack of payment. Sometimes it can be an honest mistake – they’ve forgotten, or have lost your bank details. It’s important that you take a matter of fact approach when communicating with your client. Don’t get angry; try to keep cool and simply state the facts. There could be a very good reason why they haven’t paid. It could be a reason you can help them with so that they can now make payment. It might even lead to you improving the payment process for current and future customers based on their feedback. If communication doesn’t work, you might need to resort to debt recovery lawyers in Melbourne.
Be Prepared and Persistent
Before you call a customer, review their payment history to get an idea of whether their late payment is a once-off or a reoccurring issue. Provide all the documentation they need to make payment – email them the outstanding invoice before you call so you can refer to it in the conversation. Try to think of ways to overcome objections to paying before you call in case they try to fob you off. If they agree to pay on a future date, mark it in on your calendar so you don’t forget to check if they’ve kept their word. For some clients, it may take several phone calls to secure payment, so make a note of every conversation you have with them and what is said by both parties. This can be handy information to share with debt recovery lawyers in Melbourne down the track.
If All Else Fails
If none of these tactics help you to retrieve your money, the final step is to hire debt recovery lawyers in Melbourne. These are professionals in debt recovery who can use techniques that a business owner may not be aware of. If you’ve got outstanding debts and you don’t know how to get your money, a debt recovery lawyer might be able to help.