4 Tips When Collecting Past Due Payments

The topic of unpaid invoices is never an enjoyable one. What do you do when a client isn’t paying what he owes? Without losing your patience and professionalism, here are a few tips that work well.

1. Be friendly- You don’t want to unnecessarily burn any bridges between you and a client, so take the time to discuss current options. Even if you chose not to do business with them in the future, it is always better to take the high road, keep your cool, and try to work things out personally and rationally. You may re-send invoices and reminders, stop by a client’s office, and ask how you might be able to resolve the issue. Sometimes, you may get them to agree to a settlement; it may not be the full amount they owe, but even 60-70% is better than 0. You may also be able to work out a payment plan or an arrangement that both parties can accept. If you chose to do business with them in the future, a retainer or up-front payment can reasonably be requested.

2- Check records- Before you start demanding money, it is good to get into the habit of checking your records. Your client may have already made a payment that was not properly documented (I speak from experience). Oftentimes, clients feel that your end of a contract was not upheld so they do not feel that they should have to pay you (yes, this has happened to me too). However, I keep very accurate records of the work that I complete and I compare it with the contract or agreement we both signed, so that there is no confusion. When you can approach a client with records of work you completed, they cannot dismiss you, making it a little easier for a client to see that they should pay you what they owe- business karma can be a you-know-what.

3. Work up chain of command– If the invoice is correct and your contact person is vague about when you can expect payment, you might need to start working up the chain of command. The higher up you go and the more authority that person has in the business, the more important it might be for them to protect their company’s reputation. In fact, sometimes, a person higher in authority will immediately recognize that action needs to be taken and will bypass the “middle man” who may be dragging their heels a little bit. It might be as simple as asking the right person. Not only can you resolve the current problem, you might even be able to negotiate faster payment terms for future invoices if you chose to continue doing business with them.

4- Hire a collection agency or lawyer- This is no fun for either party, so avoid this measure for as long as you can. I have waited 6 months before doing anything about an unpaid invoice. Collection agencies are scary enough to businesses that even a threat may push them into writing a check. Plus, we all hate annoying collections calls, so people tend to avoid having to deal with them at any cost. Their services range in price, but are usually affordable, especially if an unpaid invoice is over $500. This is a much better alternative than hiring a lawyer, who can charge several hundred an hour for services. Some very large debts may require this, though I have never had to go this far.

 We would like to hear from you? Have you had to collect money from a client? What worked? What didn’t? Leave us a comment or shoot us an email at info@journeybookkeeping.com. 

Advertisements

Preparing for a New Employee

I remember starting a new job once a few years ago. I was so excited to start that I went shopping for new clothes. On my first day, I got up early to look as professional as I could, but when I showed up, I was horrified to find that I had worn the EXACT same outfit as my new boss. Both the shirt and the slacks were identical. Now, we can’t guarantee to save your new employee from having some embarrassing moments on his or her first day, but we can give you some tips on preparing your office to welcome them and make them feel more comfortable. 

Prepare the Workspace and Environment

We like working in office spaces that are open, without desks clustered together. When employees sit out in the open with their team members, they feel more of a part of something big instead of an exclusive limb left off somewhere.

Welcome and Equip New Employees for Success

Equip your new employee with a welcome packet of sorts- include a history of the company, a mission statement, goals, values, and maybe some press releases or media attention. Let them know important things like where the restrooms and cafeterias are, a list of other employees and team members or who they can go to for answers to certain questions. I would have liked to have a map of everyone’s work spaces and offices to avoid other embarrassing work situations, but that is for another blog! Allow your new employees to know when important weekly meetings are, and what they can expect in their first days or weeks, as well. This takes away some of the anxiety that comes with unfamiliar places and customs.

Train Team Members Together

If you are hiring more than one person at a time, it is a good idea to have them start at the same time. This provides an immediate opportunity for new employees to create a relationship with someone they can identify with (each other) and it helps them feel a little more integrated when they aren’t “the only ones”. This also allows trainers to work with more than one person at a time, making this process cost- and time-efficient.

Establish Expectations and Responsibilities

This part isn’t much fun, but it is a crucial element in both individual and organizational development, establishing a foundation for future success.

A new employee should feel welcomed, and comfortable, but once they are in the door, it is time to work! Make sure to take the time to establish all of their responsibilities- daily, weekly, and monthly. Make sure they understand deadlines, who they report to, what their exact job description is (if it was not discussed in detail before), and current processes. Let them know whether a process is open for improvement or customization or if a process must not be changed. Some team members like the ability to be creative and find solutions, but some bosses prefer that processes stay the way they are unless discussed. (I learned this the hard way years ago.)

Integrate Newby’s with the Team

A developer at Warby Parker created a little program called “Lunch Roulette.” After each weekly team meeting, this software application randomly selects two groups of four people to go to lunch on the company’s tab, so that no more than one person from each department is in a group.

Other companies hold “team-building” meetings where they are all encouraged to work together to solve problems or mysteries. These can be fun! Often times, companies will rent a space for team-building games every few months so that new employees get a chance to bond with their co-workers, and existing employees have the opportunity to strengthen their bond.

We would like to hear your stories and tips on how you integrate new employees into your business. What has and hasn’t worked for you? Leave your comments below or shoot us an email at info@journeybookkeeping.com. We love to hear from our readers!