GETTING CLIENTS
TO PAY YOUR BILLS
Bill promptly, follow
up on collections
By JUDI CRAIG
Do you find yourself groaning
when you look at your
accounts receivable? And
feel overwhelmed wondering
what to do about them?
First, let’s look at some factors that
may lie at the root of the problem. Do
you send your bills out promptly — or do
you wait a month or two? And when a
bill isn’t paid promptly, how long do you
wait to try to collect it?
Studies have shown that the longer
you wait to bill — and collect from — your
clients, the less likely you are to be paid.
When bills are sent out the first month
after a debt is incurred, the return is 98
percent. If you wait two months to send a
bill, the return drops to 93 percent. If you
haven’t collected in six months, you have
only a 57-percent chance of getting your
money. The lesson: Bill promptly, follow
up with repeat billing each month, and
don’t wait before you implement a collection
process.
Next, if you render a service, ask yourself
how descriptive your invoices are of
the work that you’ve done. If you put“for professional services,” your clients
may question the cost; if you’ve given a
detailed listing of the work you’ve done,
clients are less likely to question your fee.
If you bill by the hour for your services
and don’t charge for some phone calls or
other items, list those calls and items and
then write “no charge.” People will
appreciate (and realize) the time that you
haven’t charged to their accounts, building
good will.
Be sure to include with your invoice a“due by” date. “Due by the 10th of the
month” or “due by the 30th” lets your
client know when you expect your bill to
be paid. Leaving it to their interpretation is
just asking for people to delay payment.
Now let’s look at the collection side of
the issue. What can you do to get that
money when a client isn’t paying?
Establish a tickler system so that if a
person hasn’t paid by the designated due
date, she gets a call from your office the
next day. Pick someone in your office
who is detail oriented and has good people
skills — and who also can be firm —
for this task. Since collection issues probably
are not anyone’s favorite job (and
often are put off for this reason), consider
an incentive for your collections person.
If s/he collects a certain percentage
of the accounts receivable in a specific
time period, s/he’ll be rewarded with dinner
for two at a favorite restaurant, a gift
certificate to a spa or some other reward
that will be motivating.
Do consider taking credit cards. Not
only will this make it easier for some
clients to pay their bills, but many clients
prefer using credit cards in order to get
the frequent flyer miles. When the person
makes the collection call, s/he may
say something like, “Good afternoon,
Mr. XX. This is Mary in ___________’s
office. We are concerned that we haven’t
received your payment and wondered if
you might have overlooked it or if perhaps
it’s been delayed for some reason.”
If the person says that the payment has
been overlooked, the collection person
can suggest, “Perhaps you’d like to take
care of this with a credit card and save
yourself the postage.”
Be clear with your collections person
about options for negotiation when someone
says that s/he is unable to pay the bill
for some reason. Perhaps a payment plan
can be set up, or maybe the bill can be discounted
by a percentage if the client
agrees to have payment in your office by a
specific date. If setting up a payment plan,
let the client state what s/he could pay and
on what schedule — it will usually be a
higher amount than the collection person
would have suggested.
Whatever is decided, have your collection
person restate the commitment
and then follow up immediately with a
fax, e-mail or letter restating the commitment.
Seeing the agreement in writing
takes the seriousness of the call to the
next level. The collection person should
also calendar a follow-up date in the
event the client does not follow through
on the commitment.
You’ll also do your collections person
a favor by creating a list of scripted
responses to the various things clients
might say about why they have not — or
will not — pay your bill. For example, if
the client says that she isn’t paying
because she feels that she did not receive
good service, the scripted response
might be something like, “Please give me
specific examples of what was disappointing
about the service you received.
I’ll be happy to take those to Ms.
_______, and then either she or I will get
back to you.”
If a client becomes angry or chooses
to dispute the charges, the collection
person might say, “Please give me some
detail about your concerns, and I will
pass the information along to Ms.
_______, and either she or I will get back
to you on this matter.” At that point, it
may be prudent for you to make the next
call to the client.
Of course, you always have the option
to turn the client over to a collection
agency or attorney. You want this to be
your last resort — and if you have a very
dissatisfied client, be aware that this type
of action could lead to a grievance or litigation
against you. Sometimes it’s worth
saving yourself the hassle and stress of a
drawn-out battle with a hostile client by
cutting your losses and moving on.
Judi Craig, Ph.D., MCC, is an executive
coach in San Antonio. She is president
of COACH SQUARED, Inc.
(www.coachsquared.com) and a senior
practice advisor with Atticus, Inc.
