If you’re offering financial options (or credit) to a customer, then they’re going to be pretty darn grateful. But how can you ensure that everything is managed correctly? That you’re going to get the payments you need on time? Here are some tips you need to consider.
Getting to know you. So just how likely is it that this customer is going to pay you back over time? The first step, of course, is to make sure they are who they say they are! Check all of the information they give you thoroughly. As long as you request the right information, you’ll be able to check their legal status. If they have a good credit rating, then that’s usually a good sign of their ability to pay. But you could take things a step further by requesting references. Other suppliers may have dealt with this customer before. Problems there may not have made it onto the credit check.
Terms and conditions. It’s essential that the customer knows exactly what the terms and conditions of the finance agreement are. It’s also essential that your business gets everything it needs to get out of this arrangement. Make sure it’s absolutely clear what the payment terms are. When creating terms, think of what’s going to best benefit both of you. Are there positive and negative ways of presenting a term – if so, which would you prefer to go with? You could, for instance, offer a small discount if the payment is made on time. This is a more “positive” way of presenting the arrangement.
Need help? Get it. A lot of businesses who deal in finance and credit may not be as experienced as they need to be when it comes to dealing with this sort of stuff. But there are businesses out there that have been built to aid companies just like yours. If you’re dealing with a particularly tricky or maturing sort of business, like B2B E-commerce? Then you can get external help with the credit management side of things. If you’re having trouble collecting payments, then you could work with debt collection agencies.
Keeping in touch. If you’ve set a particular due date, then it might be worth contacting the customer before that due date. It’s worth asking them whether or not you can expect the payment on the agreed date. It can be easy to seem pushy here, but that’s now what we’re going for. You want to find out as soon as possible if there are any problems. It’s better to know about them before the due date, after all. You could even work out something new with the customer if you’d like.
Avoid invoice contesting. What’s the best way for a customer to avoid having to pay a bill? Answer: find something wrong in the invoice and then contest it. Contesting an invoice slows down the entire process. Depending on the error that’s on the invoice, they may not even have to pay the full amount you thought you’d agreed upon. It’s vital that you make sure the invoice is 100% correct before you send it out to the customer. Make sure everything correlates with all the other contracts and terms.
Milo Senalle
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