I was asked if there is a way to utilize the positive persuasion methods we discuss in this blog when having to collect money from a late-paying client.
The questioner was not referring to those who might simply have forgotten, and for the first time. When that is the case, just call and politely remind them. There shouldn’t be a problem.
He was asking about collecting from those for whom – while it seems they will pay – it does not appear to be a priority. Perhaps you’ve called and have been told it will be there by next Tuesday, but it hasn’t arrived.
You’ve got that feeling in the pit of your stomach that:
1. You are either going to be scr…err, I mean, cheated out of the money owed after you’ve already completed the work or provided the product or…
2. If you do collect, it will be the result of having had to threaten or cajole or in some other way ruin the relationship, and you’ll lose their future business.
Regarding this last point, some might advise, “just don’t do business again with that type of person.” And, in a perfect world, that works. But, maybe now you still need their business. And, if you can both collect the money you are owed and “re-train” them to pay on time while continuing to do business with you, isn’t that a better alternative?
Here are the basics:
1. Communicate The Issue. Compose a letter. This could be email or snail mail, depending upon how well you know them and their online habits.
2. Utilize Tact. Compliment their values and integrity.
3. Show Gratitude. Express how much you enjoy serving them, and that you hope they feel the value you provide them exceeds what they pay.
4. Have a “Call to Action.” Let them know that it would “mean a lot” to you to receive payment today.
5. Allow Them to “Save Face.” Add that if there is a problem you are not aware of, you’d appreciate their letting you know so you can discuss.
The key is to not be demanding, but also to not come across as weak. A day later follow up with a call and ask if a check has been sent. Assuming they actually do plan on paying you, this should work.
Next post, we’ll look at a sample letter. Meanwhile, feel free to come up with one of your own and share it with us. You might save me from having to write tomorrow’s post. 😉
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I will try this with a consistently late paying renter that I have. Thanks for the advise.
My pleasure, Jim. Let us know how it goes!
Great advice, 90% of the time a quick email with an “hello how are things” with a quick reminder take care of the situation. If you are really creating a friendship with your clinets they never have a problem with paying.
Thank you. Yes, that often handles it. Today’s column was really for those times when a bit more is needed. You are absolutely correct though; to the degree the friendship/relationship is there, it makes it a lot simpler and easier for everyone involved. Thanks for sharing!
Great advice Bob. Most of the problem associated with late pay can be resolved by respectful communication with the other party. Most people are resistant to deal with unpaid debts because of the image of the high pressure “debt collector” that we are all familiar with. Communication leads to understanding, and understanding leads to resolutions everyone can live with.
Thanks for our guidance on this issue.
Thank you, Glenn. I agree with you completely!
Nice post, Bob. This is really good, I especially liked the list of points which you so eloquently drew out towards the end. Of course, my biggest problem when collecting money is not appearing too emotional, too aggressive or too impatient. It can be a sensitive and uneasy task for both parties involved. You set the foundation perfectly and effective and tactful communication is always the key. Keep up the remarkable work!
Thank you, Chi Chi. Yes, the problems you mentioned are relatable to many, which is why it’s important to have an already-established, unemotional and step-by-step plan that provides confidence and the environment for you to be able to have the correct attitude. And, I appreciate your very kind words!
Bob, unfortunately this is a timely post for me. 🙂 Thanks for this wonderful advice!