Gus Gilkeson How to recover late payments from your clients Magnet

The Consequences of Not Pursuing a Non-Payer

Ignoring a non-payer can have severe consequences for your business. Here are some potential risks to consider:

Loss of Revenue: Non-payers can result in lost revenue, which can be devastating for small businesses or startups with limited financial resources. Damage to Reputation: Ignoring non-payers can damage your business’s reputation, making it harder to attract new customers and clients. Increased Stress: Dealing with non-payers can be stressful and time-consuming, taking away from other important tasks and responsibilities.

It’s not enough to simply re-send an invoice and hope it will be paid, business owners need to be upfront and open with their expectations. In my experience, tradespeople can be particularly bad at this, they’ll say ‘hey mate, did you get that invoice?’, rather than saying ‘our payment terms were XYZ and you’re now overdue. When will you be making payment?’ Record the communication and what was said so there can be no doubt about what you’re asking for, and when you asked for it. Including terms in your payment agreements that you can report a business to a credit reporting agency for non-payment will assist in weeding out repeat offenders. Running a trade credit reference report and business credit score is vital before dealing with clients you don’t know or might be concerned about. A business that is paying its invoices on time won’t mind having such a clause in its agreement, but those that are repeatedly late or push the boundaries are likely not to engage with you. It helps you dodge the bullet.

Leveraging Technology to Collect Debt

The Challenges of Collecting Smaller Claims

Collecting debt can be a time-consuming and resource-intensive process, especially when dealing with smaller claims. Businesses often struggle to allocate sufficient resources to pursue non-paying customers, making it challenging to recover debts. This is where technology can play a crucial role in streamlining the process and making it more efficient.

The Benefits of Automation

Automated notifications and demand letters can be used to prompt payment from non-paying customers. These notifications can be sent via email, SMS, or even social media, making it easier to reach a wider audience. By automating the process, businesses can save time and resources that would be spent on manual communication.