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.
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