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Home-based and Other Small Business Tips on How to Get Paid
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Whether you are a work-at-home one-person shop or even the owner of a small business opportunity or franchise with only a few employees, it’s very likely that the task of collecting on past-due invoices will ultimately fall on one person…you. And while there are many perks to being your own boss, having to play the role of collections agent is not one of them.
Tips To Get Paid As A Home-Based or Small Business
Let’s face it, asking people for money―even though you’ve earned it―isn’t always easy, especially when it’s a customer or client that you know means well but who may be struggling financially. Unpleasant as it may be, the hard truth is that the longer you give someone who owes you money a free pass, the less likely it is that you’ll ever get what you’re due. In fact, studies show that if you let things go for three months your chances of collecting are just over 70%. At six months, you’re down to little more than 50%, and if you get to the one-year mark there’s only a 25% chance you’ll ever be paid.

Okay, so there’s your incentive to proactively communicate with your customers and clients about your policies and procedures for how and when you expect to be compensated right out of the gate. It’s also good reason to manage your accounts receivables early on and regularly.

But what do you do when an overdue invoice has languished too long, say for more than 30 days? According to the experts, the key is to take action sooner rather than later. Start slow and steady, and follow these basic steps:

• Reach out to your customer/client to confirm that your original invoice was in fact received and restate the original terms set forth by you and agreed upon with regard to payment. Tell your customer/client that a prompt response to your request is much appreciated.

• Start with email. If that goes unheeded, it may be time to pick up the phone. Be assertive, yet polite.

• If talking in person yields little in the way of results with your direct customer/client contact, you may want to consider moving up the chain of command, if there is one. However, you need to be respectful the whole way. Remember, while you do want to be paid, you don’t want to risk your first-line customer relationship over what may only be a temporary problem…if you can help it. If you are appealing to another sole proprietor directly, it is okay to keep up the reminder phone calls for a short while so long as they are not too overwhelming and are placed with reasonable distance between them.

• Try to obtain verbal or written confirmation that your messages have been received and that payment has been sent, as well as when it should arrive. If you don’t see payment within a reasonable timeframe of when it was promised, you need to step up the pressure.

• This would be a good time to offer new payment terms if you can swing it. Perhaps your customer/client can afford to pay a set amount each month over the next six. If this new approach still doesn’t work, then threats (gentle at first) may become necessary. Mentioning your lawyer or a collections agency is what will oftentimes do the trick when being nice just hasn’t worked.

• Finally, be prepared to take action and call in reinforcements should reasonable exchanges lead nowhere after four to six months. Wait any longer and the chances are good you may never see a penny of what you are owed.

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