How You Can Effectively Prevent Non-Payments from Customers

Posted by Tom Clark on September 2nd, 2019

If you have a business and you send out invoices regularly to clients and customers, then you know very well that there are clients who may give you a difficult time when it comes to collecting payment. Whilst the majority of your customers and clients may have no problem settling their invoices on time, you will probably encounter one or two who may give you difficulties collecting what you are owed, who pay late, who question your invoices, or who even disappear altogether. What are you to do then? This is especially tricky if they owe you a substantial amount of money. As the owner of a business, you would want to avoid this altogether. But how can you do prevent non-payments, and how do you tackle such a dilemma? Here’s how you can effectively prevent non-payments from your customers and clients.

• Do your research

If this is your first time to work or do business with a particular client, then it pays to do the necessary research. Find out what they are and who they are, and find out, if you can, about their credit score and history. If you have any contacts who have done business with them in the past, ask them how it was to deal with that particular customer. The thing is, you can prevent a non-payment from the beginning simply by screening your clients before you do business with them. There is a lot of information you can gather about a business nowadays, and you can run your own risk assessment about that client, so you know exactly who you are dealing with from the beginning.

• Don’t forget that contract

Even if you are doing business or dealing with a friend or a close acquaintance, remember this: you can never be too sure. It is always best to put things on paper, not just for your benefit, but for their benefit as well. The contract or agreement should have some specific details as well, such as the schedule of payment, the terms of payment (such as whether it should be settled 30 days, 60 days, or 90 days once you have sent out the invoice), the preferred method of payment, and the scope of the job or service you are providing. It should also include other details like the expected date of completion of the work or service (the deadline) as well as a policy on late payments or the amount they will be charged if they do not pay their invoice on time. Once you have that contract, have them sign it and keep several copies in case things go wrong.

• Require a deposit

Another thing you can do to prevent non-payment is to ask for a deposit. You can ask for partial payment straight away. You don't have to worry about requesting a deposit or a retainer, either, as it is common practice for various industries, and it helps you negotiate properly with your clients as well. If you're not sure about what amount to ask for, remember that it will largely depend on your industry. If deposits are unheard of in your industry, you can ask for something else instead – an installment fee, for instance, where you are paid portions of the total payment once you have finished certain 'milestone' parts of the work or service.

If you have done all that you can and are still having difficulties with non-paying customers or clients, your best recourse would be to turn to a debt collection agency such as http://www.nightfoxinvestigations.co.uk. With the proper help from an experienced agency, you can effectively deal with non-paying customers and clients, and you can virtually eliminate the risk of such things from happening again.