When your sales team closes on a new client, they quickly move on to the next prospect. With just a few moments to celebrate, there are still contracts that need signed and a quota to reach. As the client is set up in your invoicing system, you're given accurate information about the new sale including the client contact and accounts payable department. What happens, however, when the client stops paying? Was your sales team duped? Surprisingly, one of the reasons for nonpayment is because your information is outdated.
How accurate is your client information?
Why Clients Pay Late
It can be especially frustrating when you have a valued client relationship and they're suddenly not paying their invoices. You may be tempted to assume you've done something wrong or that the client is no longer interested in your goods or services. In fact, there are numerous reasons established and new clients pay late or not at all.
- They may be unhappy with the goods or services you've provided.
- They may be have questions regarding the invoice or contract.
- They may have assumed different payment terms and your terms aren't listed on the invoice.
- They may be unsure where to send payments.
- They may have downsized or restructured or your client contact may have left the company.
Obviously the best way to find out why your client hasn't paid is to follow-up with a friendly reminder or phone call.
Inaccurate Information Creates Payment Challenges
If your client has merged with another company, downsized or lost employees, your invoice may be ignored or put on the back burner to look at later. The person who signed the contract may no longer be with the company. The company name may have changed. They've moved locations and your invoice is waiting for the mail to be forwarded.
Consistent communication establishes a good client relationship so you know what's going on. A follow-up call when payment is delayed is helpful for updating your client records but what if you're unable to reach anyone or the client is non-responsive?
It's important to maintain and update your client information on a regular basis, especially if you want to receive payment. If you need to pursue third-party collections through a corporate collections agency, this information is vital to any collections action.
Any client billing information should be reviewed on a regular basis. If necessary, your sales team can also get involved to re-engage with the client and find out exactly what's going on. Accurate and up-to-date information - including contact information, address, outstanding invoices, correspondence - is required to track down unpaid invoices. If your accounts receivable efforts fail to recover the account, your collections partner will do what they can to research the business for updated data.