How To Get Paid Faster In Business - Birchills Blog
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How To Get Paid Faster In Business


If the nature of your business forces you to give credit then getting paid on time is always going to be a challenge. There are many ways to pursue payment but using the phone has always been the most effective way of doing things. It forces your customer to respond, unlike emails and texts which can just be ignored.  Over a long period, I have developed these guidelines to enable you to get paid faster. It's all about persistence and if you can regard it as being a game then it can actually be quite fun. The real payoff, of course, is an improving cash situation which has to be good!


HOW MUCH CREDIT DO YOU NEED TO GIVE?

The first question to ask is if you can do anything about the structure of your business to get paid.
Hotels used to get paid when you left – now they often get paid before you arrive.
BT gets paid for calls after you’ve made them but with Skype you buy credit.
Electricity companies now have payment plans when you pay up front.
So ask yourself can you do something to your business fundamentally to get paid more promptly?

TAKE ACTION

You need to make sure you’ve got all the information that you need, invoices, statements, orders and all the details of the account.
Then put yourself in the right frame of mind. You should think that you’ve got a boss who is a cruel tyrant. Everyone is scared of him because he’s a right so and so. This means when you make the call to chase payment you are really doing the customer a good turn because you are saving them from your boss – and everyone is scared of your boss.

PROMISES PROMISES

When you pick up the phone all you want to do is get a payment promise. This is a persistence game and there is nothing personal in it. There really is no need to get angry or upset – you are just helping the customer avoid future problems.
So you ask to be put through to the person who deals with payment. When it turns out they are not available, ask when they will be. If it is a reasonable period then make a note of the time and phone back. If it isn’t reasonable ask for someone else. If you are now blocked you need to wield your boss,
“I’m sorry I can’t tell my boss that – I really do need to speak to some one.” If that doesn’t get a result then the situation has now escalated to a new level.

ESCALATE

Now, you need to deploy your escalation strategy. Take the time to consider your next move and then:-
Your alternatives are:
 
  • Go round to the customers premises and sit there until some action occurs. This is not for the faint hearted but if getting paid is important enough then you should do it. You should simply be persistent  but don’t shout or get abusive. Never, ever suggest or intimate violence.  Doing this invites a violent response and can be seriously bad for your health.
  • Cut supplies or put the customer on stop. But it may also lose you the customer, so you do need to think about it.
  • A third alternative is to compose a letter giving details of the legal action you will commence, immediately.
 
Normally this escalation is not necessary and you get through after a few calls over a day or so to the right person. Remember you must be persistent and keep phoning.
EXCUSES EXCUSES

You are now looking for a payment promise. And this is where the excuses come out.

The first kind of  excuse is that the invoice hasn’t been passed for payment. So you ask who is responsible for passing the invoice. Then you go round the persistent chasing loop, until you get to talk to them, and then ask why. If there is a valid reason then you need to address it. If there is no valid reason then ask that it should be passed or your boss will not forgive you. If that produces no response then the escalation has to start.

The second kind of excuse is that it has been passed for payment in 10, 60 or 90 days time. If you can accept this then fine – make a note of the proposed payment date and phone on that day to make sure it is being paid.  Emailing to confirm the payment promise is also a good idea.  If the date is unacceptable then you need to escalate again.

The third set of excuses are the silly ones,  for instance a recent one I had was:
“I cant pay – my boss is in India for 3 months”
A common one is the:
“the mother in law just died” – how many mother in laws does a man have?
And so on...

The fourth kind of excuse and the most worrying one is:
“I’m sorry we haven’t any cash at the moment”. This calls for an immediate and forceful escalation.

Of course during any of these conversations you are going to have to overcome the reluctance to speak to you and simply be persistent.

WRITE IT DOWN

Every time you have a conversation write it down
who you spoke to
what they said
and when you are to next phone.

THE GOAL

The goal is by being so persistent you will always be at the top of the queue – the customer will just want you off their back.
Getting angry or shouting is simply counterproductive.

The Rules
So the rules are:
Invent a boss who is always demanding cash
Have all the information to hand
Make sure you have a system for recording when the next call is due and make the call when it is due
If you need to escalate then take the time to consider the correct escalation strategy


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