How Do I Make My Clients Pay Me Without Making Them Mad?


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5-26-11

I am a guest “expert” on Focus Experts which basically means that I post articles and answer questions that are in my field of expertise for internationally based entrepreneurs. Last week, a small business owner with a website and software development business posted a question that basically was “How do I make my clients pay me past due invoices without ruining the business relationship?”

My first thought was, “What relationship? You can go fishing and not get paid.”

In my opinion, the client had already put a serious dent in the relationship by making the service provider chase him for payment. A promise to pay is a promise. And it’s really black or white: you keep your promises or you don’t.
Which one do you want to do business with?

But then as the story unfolds there is a little bit more to it. Can you relate to this?

The new small business owner and his staff were highly technically skilled. It was more then just creating websites, they designed customized, expensive and highly work-intensive software for clients. They collected 50% of the fees upfront, did the work, sent and invoice and waited. And waited. And waited. And waited.

Meanwhile, they had to pay their expensive programmers, pay the rent, keep the lights on…. If you’re a business owner, you know the drill. Even if your clients don’t pay you, you still have to pay your people.

So now, the business owner was asking the expert site how he could get payment without making the other guy mad.
It was a little more information, but I still maintain if someone is out of exchange with you, you don’t have to worry about how to not make them mad. They should be worrying about YOU, not the other way around.

But, in the atmosphere of trying to help with where he is now, I came up with some suggestions straight from “53 Ways to Keep Up Your Cash Flow”.

  • Collect faster on receivables. That’s one step by itself, but it’s divided into lots of other ideas, such as:
    • Invoice quickly
    • Call immediately and get a promise to pay – definite date, definite amount
    • If you don’t get the payment when promised, call immediately
      Don’t get mad. Just be clear – I didn’t get the payment you said you would give me (insert name) yesterday. Can I come by and get it?
    • Pick up the phone. Don’t rely on mail and email.
    • Put most of your effort in early to get the money.
  • In the future, change the terms.
    • Offer a discount to pay immediately upfront.
    • Take a credit card that you can run when the work is completed.
    • Create more milestones and more payments so that you are waiting for 10% or so, instead of 50%.

Your business has three purposes:

  1. Make money.
  2. Create cash flow.
  3. Provide ROI.

If it’s not doing those three things, you’re not doing your job.



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