The 5 most common mistakes with non-paying customers
Everyone with their own business will be confronted with it sooner or later. The services or products have been delivered, but the client does not pay. To begin with, this is very frustrating, but it can also cause serious damage to the company. Therefore, it is important that you, as an entrepreneur, stay on top of your non-paying clients (debtors). At the very least, do not make the 5 most common mistakes mentioned in this article.
1. Unclear payment agreements
One of the most common mistakes companies make is not clearly recording payment agreements. To avoid ambiguity in the future, it is important to communicate clearly about prices and invoices from the start. It is also important to clearly announce rules of the game regarding payment terms and late payments in advance.
Many entrepreneurs rely on the fact that payment will be made, and do not communicate these types of things clearly with the client beforehand. This can lead to many misunderstandings and confusion, causing clients to ultimately not pay.
2. No screening in advance
Imagine this. A new client approaches your company, and you are told in advance that this client likely cannot pay your invoice. Would you do business with this party? Many entrepreneurs would answer this question negatively. Yet, very few companies perform a credit check on new clients beforehand. Still, it is important to make a good assessment of the creditworthiness of a new client in advance. That way, you prevent doing business with a client who cannot pay the invoice for your products or services at all.
3. Poor or no accounts receivable management
Another major mistake entrepreneurs make is not adequately following up on outstanding invoices. Many companies send the sales invoice and then wait patiently for payment. Ideally, most invoices will be paid on time. However, it is vital as a company to stay on top of unpaid invoices.
Devote sufficient attention to your accounts receivable management and set up a decisive policy for outstanding invoices. Think of clear payment reminders and timely transfer to a collection partner.
4. Poor customer service
If clients are dissatisfied with your product or service, they may decide not to pay the invoice. If they eventually approach you, it is important that you resolve complaints in a proper way. Proactively solving any problems increases the chance that clients will pay their invoice on time.
5. No flexible attitude
Sometimes a lack of flexibility can also lead to a client not paying. Especially in the current economic climate, it may be that a client has (temporary) financial problems. A slightly more understanding and flexible attitude may be desirable in such situations. Think along with the client and make agreements that work for both parties. This can also benefit the relationship with the client.
However, you must also be careful not to overdo this. Some entrepreneurs are inclined to show too much understanding for clients with financial problems. They remain too passive and watch the chance of getting paid decrease further and further. It is important to find the balance between flexibility or thinking along and decisiveness. Otherwise, you run the danger that your client's problems become your problems too.
Conclusion: Stay alert!
The most important advice regarding non-paying clients is to trust your entrepreneurial instinct. Be clear in your communication towards your client from the start, and take action in case of doubts. Think along with your clients where necessary, and ensure a decisive debtor process.
Are you having problems with non-paying clients, or are you not comfortable with this? Then it is advisable to temporarily engage a collection partner. With the incasso.nl app, you can quickly and easily upload an unpaid invoice. Subsequently, our collection specialists get to work to collect the invoice for you. In more than 90% of cases, the payment arrears are resolved without the intervention of a judge. Create your free account now!
