A sure method to ensure that customers pay faster
It may sound strange, but as an entrepreneur, you are an important determining factor for the payment behavior of your customers. When you have a strict debtor policy, customers pay considerably faster than when you have a ‘flexible policy’. Many entrepreneurs think that with a strict debtor policy they risk the relationship with their customers. Not so. Payt gives you tips on how you can quickly collect your outstanding invoices in a customer-friendly manner.
1. Invoice digitally
Almost 50% of SME entrepreneurs are not paid on time. One of the biggest improvements they can make to improve speedier payments is through digital invoicing. In a digital age, paper invoices simply make no sense. They simply cause delays; a paper invoice comes in through the postal service (which has already taken a day - and if you are unlucky - longer), it ends up in a stack to be scanned and only then is registered in the payment program. Scanning is an extra action that can be postponed for a few days - if the invoice is not already completely forgotten about. In a digital age, digital invoicing is an absolute must for entrepreneurs.
2. Give payment discount
“If you pay within x weeks after the invoice date, you will receive x% payment discount”. Payment discounts are offered frequently and for good reason. They work! You reward the good payment behavior of your customers and all they have to do is to pay quickly. The benefit works both ways. Because a party pays quickly, you have less interest loss. That benefit plus the time and cost associated with sending reminders definitely outweighs the cost you incur.
3. Conduct tight debtor management
Still, the very best way to get invoices paid quickly is simply tight debtor management. This means that you have a clear payment term and then maintain it. If your payment term is 14 days and your customer has not yet paid after the expiry of that period, send a reminder immediately on the fifteenth day after the invoice date. Some companies only pay after a first reminder, so do not make your payment term too long. Clearly indicate in your reminder that payment is overdue. After all, the invoice may have escaped the customer’s attention.
After the first reminder, you can choose a second reminder or demand immediate payment. Most people do find a request for immediate payment a little harsh and therefore opt to send a second reminder, which is more strict in tone. Send this reminder no later than two weeks after the first reminder and order your customer to pay within five working days. If your customer does not pay after the second reminder, you can easily start a collection process. The big advantage of tight debtor management is that you show that you are on top of your debt collection and that the invoice has not escaped your attention.
4. Automate your debtor management and collection process
If you choose to automate your debtor management, your invoices and reminders will be sent automatically. Because Payt links with almost every invoice- and accounting packages, the software seamlessly connects to your existing package.
You can also set all preferences related to your debtor management yourself. This way you can:
- determine after how many weeks you want to send a reminder. The software checks whether the payment has been made during that period. If not, a first and - if necessary- a second reminder will be sent automatically.
- easily communicate about (outstanding) invoices via the Payt platform. The payment reminders contain a link with which your customer can immediately pay the outstanding amount via various payment methods.
- temporarily stop or pause the process per customer. Has the customer contacted you or is there any other situation as to why you do not want to continue sending reminders? Then you can simply pause or stop the debtor process at the touch of a button.
- record and monitor payment arrangements quickly and easily.
Start improving your debtor management today!