When a client owes you money, any interaction can be strained or even awkward. You want to maintain a good quality business relationship but you also have to talk about money... and that can be an uncomfortable conversation. While there are no guarantees that your clients will always pay on time, there are some things that you can do to get them to pay faster.
In business relationships, money is part of the equation. The thing to remember is that both parties are looking for value and trust. Your client may ask for discounts. You may want to be paid up front. Your client may need to settle old debts with you. These conversations don't have to be uncomfortable if you know where to start.
Here some tips for negotiating money with your clients.
On this blog, we stress the importance of signed agreements, payment terms and getting everything in writing. This can seem like yet another step in the B2B relationship process but if you want to get paid, it's completely necessary to have proof that both parties knew what was expected of them.
As a great example, a poster on Reddit asks, "Am I the a$$hole for invoicing a client when they changed their mind?"
In this particular case, the client requested work on a website and then changed their mind during project. When the website developers invoiced the client for what had been done, she refused to pay because she didn't have a completed project... yet she had asked them to stop work because she found a cheaper alternative.
Can this website development agency still get paid when the client changes their mind?
When you're running a business, especially a business that works with other businesses, you know the hard fought battle that it takes to build a long-standing relationship. You have to earn the trust of your client so they know that your products or services are available to help their business be better. That relationship can turn sour if you've committed to your agreement and they're not paying you for it. Instead of taking it personally, it may be time to litigate.
Top 10 Tips to Know When To Take Your Client to Court.
Collecting on your accounts is part of normal, healthy accounts receivable management. When invoices or accounts aren't paid on time, however, your business should have a documented process for collections. Your payment terms and collections policy will be clearly stated on your contract agreements and on your invoices.
Within this post are best practices for contacting your accounts, when, how often and by what means. Read more to build out a collections checklist and workflow for debt collections.
Here's a Collections Checklist & Workflow for Delinquent Accounts
You might feel a bit uneasy when you hear the term "Debt Collection". It could conjure memories of unwanted phone calls or uncomfortable conversations about money. You may be thinking of Consumer debt collections. However there are differences between Consumer and Commercial collections:
Commercial debt collections, or business-to-business (B2B) collections, is used by businesses who sell or work with other businesses. Examples include creative agencies, consulting, manufacturing and freelance writing.
Consumer debt collections refers to businesses who work with consumers - such as retail, utility companies, healthcare - and is used to collect when consumers owe money.
Read more to learn about commercial debt collection, regulations around the process and if it can work for your business.
Nothing is more frustrating to a business owner than delinquent customer accounts. Delinquent accounts and unpaid invoices means lack of cash, strained client relationships, added stress and more. Unfortunately, according to a recent survey, more than 80% of small business invoices are 30 days past due.
To avoid becoming part of the rising statistics, follow these 3 simple steps.
There's nothing more frustrating than waiting for money. You've built a budget around it. You've planned purchases or payroll on the expectation of receiving it. You may have even noticed a trend of clients who seem to be nonchalant in getting you paid on time. You're pulling your hair out asking, "Why does this keep happening!?" Keep reading to learn why businesses fail to pay their invoices.
Why Your Clients Don't Pay On Time
One of the biggest factors determining the success or failure of a business is how well they manage their accounts receivable. Accounts receivable management is defined as the practice of collecting money that is owed after extending credit for a product or service. You may not think of invoicing as extending credit but anytime your business delivers a product or a service and has to wait on payment, you're effectively giving the other business a credit line. That payment should be received in a relatively short amount of time or your cash flow is affected.
Here are the VERY BEST practices to manage and collect on B2B accounts receivable.
If you're running a business or simply part of the accounts receivable department, you know that unpaid invoices can be the bane of your existence. You need money to pay bills. You need money to invest in the business. You need those invoices paid so you don't have to make an uncomfortable phone call.
The best way to get your invoices paid on time is to determine what processes or systems work best for you and your clients. These processes will help you to improve cash flow by increasing consistency, timeliness and accuracy.