Customer does not pay: what now?

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Sanne de Vries July 9, 2024
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Payments are like the fuel for every business. They ensure that you can pay your bills on time and invest in the growth of your company. Therefore, it is important to understand what to do if a customer does not pay. By acting actively and strategically, you reduce the impact of non-paying customers.

Why does a customer not pay?

If a customer does not pay, it does not directly say anything about the service or the quality of your product. There are usually other reasons for unpaid invoices.

Financial problems

Customers sometimes experience financial pressure due to high costs and unexpected expenses. How do you recognize this? Pay attention to the following signals:

  • Payments that arrive after the agreed due date.
  • Communication in which customers express their concerns about their financial situation.

If you pick up on these signals, it is an opportunity to talk to the customer. Read in “3 steps to get the customer to pay” what you can do. Consider issues such as insufficient liquidity to pay bills, dissatisfaction with the service, or confusion about when payment is due.

Insufficient communication

If customers are not clearly informed about the payment terms, confusion arises, such as:

  • Uncertainty about when the customer should pay.
  • Questions about the received invoices.
  • Confusion about the payment terms.

To prevent these problems, it is important to communicate clearly about payments from the start of a customer relationship. Ensure that customers understand:

  • When payments should be made.
  • How much needs to be paid.
  • Which payment methods are accepted.

Communicate regularly with a customer, for example weekly or monthly. This means you do not wait until a payment problem arises. Consider setting fixed times for this, so it is clear to the customer when they will receive this information or updates.

Repeat important details, such as the due date, the amount, the payment methods, and possible penalties or costs. This prevents confusion and helps customers pay on time.

3 steps to get the customer to pay

Have you tried everything to get the customer to pay, but the payment is still outstanding? Then follow the next three steps.

1.     Friendly reminders

Start by sending friendly reminders, reminding the customer that the payment term has expired. Mention the following points in the reminder:

  • The invoice number.
  • The amount still outstanding.
  • The payment term that has expired.
  • The request to still make the payment.

This gives them the chance to address their financial challenges.

Example of a friendly reminder

Dear [customer name],

We would like to kindly remind you of invoice number [invoice number]. The invoice amount of [amount] has not yet been received by us.

The payment term of this invoice expired on [date]. We kindly request you to pay the outstanding amount within [number] days.

We appreciate your cooperation and hope to continue it in the future. If you unexpectedly have problems with the payment, we would like to hear from you.

Kind regards,

[Your name]

You make the reminder personal by adding a sentence in which you thank the customer for the cooperation and would like to maintain it. This shows that you understand the situation and want to find a solution.

2.     Payment arrangements

Is the customer having difficulty making the payment in one go? Then it is a good idea to offer a payment arrangement. This means that the customer pays the amount in installments.

A payment arrangement is a good solution for both the customer and the entrepreneur. The customer then spreads the payment over a longer period, reducing the financial burden. The entrepreneur still receives the payment, but at least gets their money in the long run.

If it is not a problem for your company to receive the payment later, then this option is worth considering to help the customer.

3.     Legal steps

Do reminders and payment arrangements not work? And does the customer keep postponing the payment? Then consider taking legal steps. This means seeking help from a collection agency, a bailiff, or going to court to ensure that the payment is made.

Keep in mind that seeking legal help costs money. This means you have to pay for the services of, for example, a collection agency or bailiff.

Before taking these steps, you must carefully consider whether the costs of legal collection are worth it. The amount of compensation you can recover from the non-payer is determined by the court. This may be lower than the actual costs you have incurred.

How Payt helps with non-paying customers

At Payt, we have one goal: to make your debtor process easier with our debtor management software. This is how we do it in a nutshell:

Faster payments

With Payt, we ensure an average of 30% faster payments. Through consistent follow-up of invoices and offering multiple payment methods. Customers are automatically reminded of their outstanding payments with our software, increasing the likelihood that they will pay faster.

Less work

Save up to 80% of the time needed for debtor management by automating administrative tasks. Payt takes over the time-consuming process of sending reminders and handling invoices, allowing you to focus on other important aspects of your business.

A major advantage is that our software works seamlessly with almost all existing accounting systems. You do not have to figure out how our software works yourself. When you become our customer, one of our implementation specialists helps with the integration with your current systems.

More control

You retain full control over your administration. With Payt, you determine when and how customers are reminded. The automated follow-up ensures that you are always aware of outstanding invoices and their status.

Schedule your personal online demo

Do not wait too long for your money. Take control with Payt and discover today how it helps your business. It brings benefits such as faster payments, less work, and more control over your finances.

Want to see how it works? Then schedule an online demonstration or download our brochure. More than 10,000 companies are already satisfied users of Payt. Join this group and give your organization the financial boost it deserves.

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By Sanne de Vries

Sanne is a business consultant at Payt. She helps companies optimise their financial flows with attention to detail and a deep understanding of business processes.

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