“A Primer on Collecting Late Payments, Part 2"
The first general rule on collecting late payments was about overall professionalism and communication style. The second point naturally follows from the first one and is a critical elaboration of it.
Second general rule: Payout and delivery, both amounts and due dates are a critical part of the agreement. Make sure they are stated in writing in advance.
Be aware that it is bad practice to make any business agreement otherwise. In many cases it may be appropriate to add provisions to the agreement for late payment, which may even include late payment penalties or collection charges. It is a good idea to tie the price very specifically to the payout, payment terms and deadlines. For example:
* A payment of USD $1,000 will be made by the buyer on 5 March 2012.
* This amount represents a 20% discount off the regular price of USD $1,250.
* Discount prices are no longer valid for payments made later than 10 working days after the due date.
In the above example, I've stated the late payment penalty as a discount because it sounds friendlier and more professional. Depending upon the circumstances your mileage may vary with this approach, but all else being equal you are better off with a diplomatic approach that shows goodwill and diplomacy rather than trying to muscle and beat your customer into submission. Human nature being what it is, keeping the atmosphere friendly tends to be good for your cash flow.
A Primer on Collecting Late Payments, Part 3
In my previous two posts on collecting late payments from customers and business partners I explained what I called the first and the second general rule to getting your money. If you haven't read them yet, and you are interested in getting better in this area, take a quick look and see whether you think following these guidelines can dramatically improve your results. In my experience, they can.
Just to paraphrase/summarize:
* Rule one emphasizes the overall importance of professionalism and good communication.
* Rule two stresses the value of making the payout and due dates a critical part of your formal agreement with the customer.
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These games have not been tested by the publisher of this article, and we accept no responsibility for any issues that you may come into contact with then purchasing or using these games.
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