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Preventing Non-Paying Customers

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customer not paid

Preventing Non-Paying customers is a subject matter we are frequently asked about. It is one of the most asked questions in the industry and one there is no strict answer for. There are many different situations is which a non paying customer can arise. Typically, non payment arises from the procurement of goods, credit or services.

No Small Business can afford to carry customers that do not pay. If you are a small business owner reading this then you will be well aware of that. No Business loses customers if they are required to pay. It is the oldest prerequisite of Commerce. You supply the goods or services, the recipient then pays the agreed sum. Simple but that is not always the case.

As for most things in life, prevention is better than a cure. It pays to exercise caution and a few good practices can help Business owners protect themselves. Chasing non payment is real chore and stressful. Whether you are a Small Business or are Self Employed and not been paid. The fact is that chasing owed monies can be a huge challenge and will test your patience.

Nobody ever considers having a customer that doesn’t pay when starting out. With a few basic tips, you can help keep that risk to a minimum.

Minimising Non-Payment

You need to focus on the customers that pay. not those that don’t. So to avoid the issue, here are a few precautionary measures you can use.

  1. Know who you’re dealing with – If you have never worked with a particular client or customer before, do your homework. Try and find out their reputation for paying on time. This applies to both business and Private Customers. Screening your customers in advance can help you make smart business decisions.
  2. Have a contract/agreement – It doesn’t matter if it is your friend or some high flyer who drives a Ferrari. Ensure you have a written agreement which clearly documents the obligations for both parties. You should also details the terms of payment and the agreed fee. This will be the backbone of your relationship with the customer should the situation sour. It can also help avoid any doubt or ambiguities. Preventing a non paying customer is a objective here and definitive terms will assist you with that.
  3. Request a deposit – If it is an expensive job or items you are providing, you entitled to ask for a deposit or retainer. It is very common in some sectors for an initial fee to be paid that will help cover initial costs. The amount you ask for largely depends on your industry. Alternatively, you can stagger payments. Payments could be requested at different stages of the job. If it is goods being ordered, you are entitled to ask for a deposit.

Dealing with a Non-Paying Customer

Sometimes, no matter what you do, you will encounter somebody that has not paid. There are a whole stack of reasons or excuses but that is not your problem. It is a proven fact that the faster you act, you faster you get paid. Statistics support this so lets look at what you can do.

  1. Consider your options – If your customer has broken promises to pay, your instinct is to follow your principles. From a Business point of view, you should ask yourself is it worth it. If it is only a small amount i.e. £40 then it maybe better to write it off. If the amount runs into the hundreds or thousands then it is in your interests to take action.
  2. Send a Letter – When payment dates have been ignored or missed, time to adopt a formal stance. A letter outlining the situation will let the customer know you are serious about getting paid. Attach a copy of the invoices to your letter and hope it is an oversight on their part. Request payment within 7 days or you may take action to ensure the owed sum is paid.
  3.  Follow up the Letter – If the 7 day deadline is breached then a follow up letter and/or phone call is needed. If they ignore your attempts then at least you know the position. Then it really is time to act or risk not getting paid at all.
  4. Speak to a Expert – Speaking to somebody that is very experienced in dealing with non paying customers will help. A Debt Collection Expert will enable you to understand your position. You will be advised of the options available to you and the kind of time frames for action.

Top Solution to tackle the problem

Frontline Collections were established in 2006 to specifically deal with the problem of Debts owed by Individuals. In fifteen years we have learnt many things about preventing non-paying customers. We have also learnt of pioneering ways to combat the issue.

If you or your Small Business are having issues with Customers not paying, contact us. We will provide a Free review of your problem and advise of the best possible solutions. Nobody wants customers that do not pay. So if you are struggling to get paid for your goodwill, get Professional Expert help today.