Telling your customers when to pay you

When you make a sale you want to know when you will be paid.  Controlling when you get paid is a huge component on whether your business will survive or fail.  

If you extend credit to any customers, new or existing, outline how and when you want to be paid.  Be specific on each factor and let customers know what will happen if they do not meet those payment requirements.  Something to remember is that if you don’t set the payment terms for your business, your customers will and you probably won’t be happy with those terms.  The terms you set are to protect your rights, limit your liabilities, and provide you with some security that you will get paid.

When you are deciding on your payment terms or when you want to be paid, think about when your bills are due.  You will want to get paid before your bills need to be paid so that you have the cash in plenty of time to pay your bills.  Check your invoices and see if you are offered any early-pay discounts, this can save you hundreds of dollars over the course of a year.  If you don’t have any accounts that offer this, contact your vendors to ask about early-pay discounts.  

Your terms should outline how and when you want to be paid as well as the circumstances that will follow if the payments are not made as agreed.  Once a week, or at least twice a month, print out and take a good look at your accounts receivables aging report, are customers becoming slower in their payments?  Follow up with those customers now and get them back on track, maybe with a payment plan if they cannot pay in full at this time.

Bio

Michelle Dunn is an award winning author and columnist frequently featured in the Wall Street Journal, CNN and Forbes. Look for her newest book being released in May by Wiley Publishing titled, "The Guide to Getting Paid, weed out bad paying customers, collect on past due balances and avoid bad debt, available for pre-order now on Amazon.