6 tips on chasing payment

Did you know that more companies go out of business through cash flow problems than for any other reason?

And it seems the bigger the customer is the more it behaves as a law unto itself and the longer it can take to pay its outstanding debts. Even though the government keeps making noises about improving the situation for smaller businesses, little of practical value appears to filter through – not much help if that customer is your customer.

The best way would be to avoid the necessity of chasing payment altogether by only providing the product or service on receipt of money, or offering attractive discount savings to encourage prompt payment. But that doesn’t help if neither of these options is available to you or applicable to your business. Another thing you can do is to ensure that you make one to one contact as soon as payment becomes overdue.

The telephone can be a very useful tool in chasing money, second only to presenting yourself at the customer’s premises!

  1. Be prompt in chasing – you’ve provided the service or product
  2. You are entitled to the money by the agreed time
  3. The longer you leave it to chase your money, the further down the queue you’ll go when the cheques do get written out
  4. Speak initially to the Decision Maker who bought from you – three reasons for this:

    This is the person who values the purchase

    This is the person with whom you are building an ongoing business relationship

    In short, this person has a vested interest in keeping you sweet – I can remember numerous occasions when I’ve stood over Financial Directors and made them write out a cheque after I’d received a telephone call from a totally fed up supplier!

  5. Don’t back down – be prepared to state your case to the top man or woman
  6. Be pleasant but firm – no-one wins if a slanging match is allowed to develop!
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