Payment terms are not sacred for 48 percent of people more than once. A good strategy for late payers helps to minimize the inconvenience. This ensures a healthy cash flow and reduces the risk that you cannot invest or that a period with less revenue puts your company in trouble.
The better an invoice communicates what is expected from the customer, the better customers meet the expectation. After all, invoices are communication tools.
Carlijn Hofland, marketing manager at Lindorff, advises always to focus on the customer relationship.
It is important to personalize the invoices. You should address the person personally. Not ‘Dear Sir/Madam’, but the name itself.
Hofland would agree; debt management is simply customer management. Yes, you want the invoice to be paid, but also all future invoices you send to a customer. Request your customer to pay and show understanding for any reason for the delay. Communicate a shorter than usual payment term. The payment is already delayed; therefore, you can expect a faster payment. Conclude with something like: “If this reminder has crossed the payment, you can consider it not sent.”
Extra service for your customer
Is there no payment after the first reminder? Then offer installment payments in the second reminder. Do this only if you have set strict conditions for yourself and the customer. This is a service you cannot offer to everyone, after all, you are not a bank! Which of your customers deserve it? Remember that there is also the possibility to pre-finance an invoice.
Key aspects of a strategic approach to more successful invoicing:
- Send at least two reminders before any form of legal action
- Show understanding for a delayed payment; it may have been unintentionally forgotten
- Provide a payment term that is shorter than the one used in the initial invoice
- Keep track of data on your customers’ payment discipline in a dashboard
- Experiment with different terms, tones of voice, and payment options
Want to know more about how to invoice even better? Every company can use these 3 tips to get paid faster and easier.
Does the invoicing strategy work?
By invoicing data-driven, you map out your customers’ payment behavior and quickly find out what works best for your customers. Based on that data, you can experiment with the number of reminders, payment terms, tone of voice, payment options, and more. With a dashboard, you can see exactly how and why payment discipline improves. Is there a sudden change in a customer’s payment behavior? That may indicate problems. Respond to it with your communication. Perhaps it is good to make a call then. Getting paid better while maintaining good customer contact is essential if you want to maintain a long-term collaboration. Invoicing is not a verb for nothing!
