Invoicing considerably more successful due to this strategic approach
Payment terms are often ignored. A good strategy for ‘late payers’ will help to minimize this. This ensures a healthy cash flow and reduces the chance that you will not be able to invest or that a period with less turnover will cause problems for your company.
The better an invoice communicates what is expected of the customer, the better customers meet the expectations. Invoices are means of communication. Carlijn Hofland, marketing manager of Lindorff, advises to always respond to the customer relationship.
“It is important that you make the invoices personal. You must write to the person personally. Not ‘Dear Sir/Madam’, but the name itself.”
Hofland will agree: debtor management is simply customer management. You, want want to have paid the invoice, but also all future invoices that you send to a customer. Request your customer to pay and show that you understand any reason for delay. Do communicate a shorter than usual payment term.
The payment is of course already late; you can therefore expect a faster payment. End with something similar to, “if this reminder crossed the payment, consider it unsent”.
Extra service for you customer
No payment after the first reminder? Then offer payment in installments in the second reminder. Do this only if you have established strict conditions for yourself and the customer. This is a service that is not for everyone, after all you are not a bank! Which of your customers deserve it?
Key aspects of a strategy for better billing
- Send at least two reminders for any legal action
- Show understanding for late payment; after all, it may have been accidentally forgotten
- Enter a payment term that is shorter than you use in the initial invoice
- Track data on your customers’ payment discipline in a dashboard
- Experiment with different installments, tone-of-voices and payment options
Does the billing strategy work?
By invoicing data driven, you map the payment behavior of your customers and quickly find out what works best for your customers. Based on that data, you can experiment with the amount of reminders, payment terms, tone-of-voice, payment options and more. With a dashboard you can see exactly how and why the payment discipline improves. Is there a sudden change in a customer’s payment behavior? That can indicate problems. Respond to this with your communication. It might be good to give a call.
Getting paid better while maintaining good customer contact is essential if you want to maintain a long-term partnership. Invoicing is a verb for a reason!
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