It probably goes without saying that debt works in a vicious cycle. They can’t pay you because they are owed money themselves and those people can’t pay because people haven’t paid them. And on it goes. Around and around with no one getting paid, and everyone suffering. The good news is that the cycle can be stopped, or at least abated- the key is to not allow yourself to be at the mercy of your customer and your customer’s customer. Tight deadlines, COD only policies, late fees and interest charges, part payments, etc. There are many things you can do to mitigate the pain of a slow paying customer, but how to respond when told that you will have to wait until their customer pays them is something many small business owners struggle with. Tell them it’s not your problem and you get accused of not caring and having zero empathy. Tell them that you are happy to wait and suddenly you go straight to the bottom of their priority list, below even the video store late fees!
Here are some suggestions for how to be neither of these extremes, rather a combination of both- a position that will see you as understanding but not accommodating:
1. Respond with “Sounds like we are in the same boat then, chasing customers for money. I find the key is to be persistent and determined and ensure you get a payment of some sort that day”.
2. Ask them what date they are supposed to be paid and then ask them to score the likelihood of that happening out of 10. Is there customer a regular? Are they reliable? What will happen to your payment if they don’t pay?
3. Recommend they download the CollectMORE debt collection app if they need help getting paid. This has a two-fold benefit: You are seen as helpful and they will want to return the favour, and it also increases your chances of getting your money.
4. Explain that you are happy to work with them, but you require a goodwill payment that same day.
5. Ask them if they can pay you using funds from other customers. Many small business owners and accounts staff will mentally “pair” your debt with a similar sized debt of their own, and will only pay you once that debt has been received. Encourage them to look elsewhere for funds to cover your invoice.
In summary, by all means work with your customers but don’t allow them to treat you like a bank. Ensure they prioritize your invoice and above all else, always ask for a part payment that day. Cheers