This article is the fourth in my series on how to collect late
payments. If you missed articles one, two and three, they covered
what I call the Four General Rules to Getting Your Money. You can
follow the links back to them here.
Now, on to the next lesson. In the previous article I said that the
most important of the four general rules was to --
Stay right on top of the customer’s missed payment deadlines.
It is a surprise to me that 99 times out of 100 people fail to understand why this advice is important and what it actually means.
Look back to rule three:
Avoid unecessary and unnecessarily awkward situations.
The longer you let a deadline slip, the more awkward the situation becomes, and the more difficult it can be to prompt your customer to action.
Viewed another way, the key to understanding rule 4 is just a matter of numbers. The more customers you get to pay you as soon as possible, the lower your default rate will be. The closer to a deadline that a customer pays you, the less likely he will be to ever default in the first place.
Having said that, it should also be well documented that a contract for services or purchase agreement has been made for the delivered goods or rendered services so that you are not confronted with some kind of chargeback syndrome.
After you have gotten past that hurdle, the longer it takes a customer to pay you, he more likely he is to default or to become delinquent in some way.
To avoid this difficulty, I recommend something called M.E.S.H. It stands for "Meet Every Situation Head on."
I'll go into more details about this approach in my next article.
“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.
I recently read a post on zenhabits.net, detailing 12 rules fitness expert Craig Ballantyne lives his life by. I figured this is a great topic to tackle for Travel n' Wellness by answering the question: "What wellness rules do I live by while traveling?"
Before delving into my rules, I'd like to separate myself from Ballantyne and the manner in which he laid out his rules.
In Ballantyne's introduction, he gives the example of vegetarians and how they're dogmatically committed to following a certain set of protocols. Vegetarians, he says, no matter the circumstance, will not eat meat. They've created a unique world perspective that includes a strong commitment to not eat the flesh of any living organism. This world perspective enables them to entertain guilt-free behavior congruent with personal goals.
Let me make something clear: Dogmatism should not be the goal in following any rules. When you follow something dogmatically, you often do so in the face of conflicting logical evidence.