One of the company owners asked for recommendations on how to collect accounts receivable. Here is a short excerpt from the new book Financial Planning: The Art of Income Generation.

The collection work has its own technology, which means that the client needs to be reminded in time, gradually increasing the pressure. This requires a very high degree of discipline, organization and the ability to demand fulfillment of obligations. These qualities are usually not found in salespeople, whose talents tend to be quick to build trust and maintain interest.

1. A phone call with a friendly and polite reminder that the client must pay the bill within the next 3 working days.

2. Call on the last day of the due date. In the middle of the working day, the client is asked if the payment has already been made. If payment is not made, he is affably but firmly reminded that he has undertaken to pay within that time frame, and is required to pay by the end of the day.

3. If the client has not paid on time, the next day he should be sent a letter by fax or e-mail. The letter must indicate the requirement to pay or penalties will be applied.

4. After sending such a message, you must call and demand that he either pay within a day, or provide an official letter with the date of payment.

5. If there is no payment and there was no letter with a request to postpone the payment date, you must call the next day and demand an official letter.

6. If the client does not send a letter within a few more days, he will be sent a formal claim with a warning that the case will be sent to court if no payment is made within a certain period.

7. If the client has not fulfilled the requirements, send all the necessary documents to lawyers and start a court case.

This sequence may seem too rigid, but this is just an example, you can develop a softer based on it. Please note that in order to do this work, the employee must enter the “Level 1 Impact” task on the calendar for each account, and then complete this task punctually. In order not to miss any payments, he must keep the appropriate tables, constantly work with the calendar. The implementation of the “impact of the 2nd” level requires you to call not just on a certain day, but at a certain time. Sellers tend to just forget to do this. Considering that a company can have dozens or hundreds of invoices for payment, this is quite a lot of very specific work. When they try to entrust such work to sellers, the result is always the same - they often cannot complete even the first step on time and correctly, they almost guaranteed to “forget” about the second, and they are afraid to even think about the next steps.

When we implemented the “incremental pressure” approach, it always resulted in higher income and a significant reduction in receivables. After all, the majority of clients make payments rather chaotically, they pay first of all to those who demand payment. Of course, this approach can lead to the fact that the company will lose some small part of its customers, but, oddly enough, such losses also contribute to income growth. The reason for the increase in income is easy to understand - sellers, instead of clinging with their last strength to problem customers, are forced to look for new ones. At the same time, the company gets rid of customers who eat up resources (working capital and working hours), they go to competitors and create difficulties for them in their work. But, interestingly, when implementing this approach, most of all disagreements arise among the sales department, they always say the same thing: “We will lose customers, everyone will leave us, it is better we collect payments ourselves”.

- We continue to talk about how companies work with accounts receivable today. In the last article, it was about building an effective system for the return of "receivables" and which of the employees should deal with this. Now let's talk about how to work with already arising (or just about arising) debt, as well as about the psychological intricacies of communicating with debtors.

3 questions with answers that a debtor should know

I recommend starting with outreach. It is advisable to notify the client in writing (send a pre-compiled memo on working with a commodity loan), as well as orally speak out the sequence of actions, answer these questions:

Question 1: "Why is it important to pay off accounts receivable on time?"... Explain the reasons:

1. Maintaining a trusting partnership. We strive to develop partnerships, trust and respect the choice of customers. Therefore, we ask you to treat our demand with the same respect - to pay off accounts receivable on time.

2. Preservation of preferences and discounts. The future conditions for working with our company depend on your financial discipline.

3. Preservation of reputation. The more reliable the reputation of your company is, the more comfortable conditions for deferral and discounts you will receive.

4. Granting from the company an additional discount for "prepayment".

A common problem for many IT consultants is that customers who require urgent service are not in a rush to pay the bills themselves. It would seem that the easiest way to solve this problem is to work only with paying customers. But what to do with those clients who constantly delay payment. A late receipt of funds can be a disaster for your business. Here are some tips on how to get customers to pay and get paid on time.

Inquire about the customer. You need to know who you are going to do business with. Before accepting a job, carefully evaluate the client. Make an appointment at his office. Your first impression won't fool you. Even if the customer's solvency cannot be determined, the level and scale of the company can be assessed. If it's a startup that has no website, no phone, and no real way to prove its worth, it's likely to be difficult to pay. But even if it's a stable company, it is worth considering a small upfront payment.

Issue invoices on time. Make sure you send invoices on time. Form an invoice and send it to the client within 12 hours after the successful completion of the work. Many invoices are returned due to incorrect registration. Each invoice must be uniquely numbered and accurately describe the work performed. The invoice must contain all the necessary information: your legal address, TIN and bank details. Meet with the customer's billing officer to know who you are billing to and who you can contact for payment information.

Don't jump to conclusions. If the invoice is not paid on time, wait a few days and contact the client's accounting department. Ask them politely about the account status. Your anger will not speed up the payment, but will only escalate the situation. If after that the money has not arrived, call the client himself. If you work with a client who does not have an accountant, you should wait at least two weeks and only then contact the client in order to discreetly remind him of the debt. Usually the money is received within two days after such a phone call.

Set interest and penalties for late payment. When concluding a contract, make sure that the client understands the risks of late payments. Include in the service agreement a clause stating that in case of late payment a penalty will be charged in the amount of X% for each month of delay. This should also be reflected in all your accounts.

Do not provide technical support. When a non-paying client comes to you with another problem, you should refuse to help him until the debt is fully paid off. It may be unethical to remind a client of his debt in times of need, but you cannot work if you are not paid. Remind the client about unpaid invoices and then discuss how you can solve their problem. Maybe he will agree to pay debts if you agree to solve his current problem.

Refuse to order the equipment. If a customer who owes you money offers you a new project that requires the purchase of new servers, workstations and other equipment, you should not order the equipment until it is paid in full or at least partially.

Threatening equipment shutdown. Some IT consultants reserve the right to remotely shut down information systems, servers, and routers, and even physically withdraw equipment if payment is not made within a specified period of time. The problem is that you have to convince the client to sign an agreement that includes such a right before providing the equipment or services.

Fight non-paying customers. If in spite of everything the client refuses to pay, sue him or contact a collection agency. Remember that you must act strictly within the law, so you cannot threaten the client with physical violence or damage to his property. In any case, it is worth consulting a lawyer.

For many IT consultants, billing is boring and tedious, but it is part of the business and cannot be avoided. Getting it right from the start is not a huge burden.

Based on materials

This is a service letter, which says about the approach or end of the deadline for the implementation of certain tasks, obligations, events

The reminder must certainly be benevolent, unobtrusive: in no case should the addressee be blamed, since the reason for the delay in payment or non-payment, for example, may be very difficult financial situation in which he finds himself.

The content of the reminder letter primarily depends on whether for the first time, for the second or third time, you remind your partner of the fulfillment of his obligations, non-compliance with the deadline for paying Tosho bills. If the client does not respond to your reminders, then, of course, you will have to inform him of your intention to go to court and terminate the contract. However, even in this case, the writing style should be polite, restrained.

For example:

... Respected!

... Taking this opportunity, let me remind you. You what the due date is for. Your order No. from (date) expired

... We will. Thank you if to (date). You will send a translation. Of your debt in the amount

apologies for bothering you. You about this

... We remain with respect

... Dear sir!

... Walking. To meet you, we extend the payment term until (date) / we execute at the same time. Your new orders. If you do not pay the debt by (date) and do not send a check, shows payment, we will be forced to temporarily suspend the execution of all. Your deputy broadcasting.

... We wait. Your answer

... Sincerely

... Dear Sirs!

... Sorry to bother you again. You, but unfortunately we have not received any response to our previous reminders sorry for that. Your company was so careless about our requests, although we, for our part, always strictly adhered to the terms of the contract and fulfilled all your orders with high quality.

... Despite repeated reminders and measures taken,. Your debt not only remains unpaid, but also continues to grow, so we consider it necessary to report. To you of your intention to terminate and contract.

... It's a pity, but we see no other way out of this annoying situation.

... Dear Sirs!

... Sorry, please, but we have to remind you again. Wali about the large debt to our firm that continues to grow. We have always tried to understand. Your financial difficulties, but this time the debt exceeds all previous ones, and the payment deadline is long over.

... Hopefully. You understand that we can no longer neglect the interests of the company, and therefore are forced to file a claim in court

... It's a pity that our cooperation was unsuccessful.

TYPICAL turnover

First mention

1 will allow. Remind you of

2. Taking this opportunity, let me remind you that. You are in arrears

3. Please. You pay special attention to the fact that u. You have a debt in the amount

4. We would like to remind you. You about

5. We remind you. To you that the reporting deadline has expired (date)

6. We consider it necessary to remind. To you that according to the contract the commission should be paid by (date)

7. Forced to remind. You that the due date for payment of invoices for the printing ordered. Your printing products pass (date)

8. B. By the way, we remind you. What a shipment to you. You have run out of goods from the warehouse yet (date)

9. It will be appropriate to recall that

10. We believe that this non-payment is only an omission, and we hope that. You will eliminate her within

11. To. You were able to quickly navigate the situation, we are sending. Copies of invoices that have already expired

12. Our accounting department reported that. You haven't paid several bills on time

13. We hope that this non-payment is just an unfortunate mistake that will be corrected in the near future

14. Sorry (we are offended) that we have to bother. You about this

Repeated reminders

1. We are very uncomfortable that we have to remind again. You about

2. Unfortunately, we have to remind again. To you that you still haven't received from. Of you paid bills

3 we are very upset that we are forced to remind again about the presence of several still unpaid bills

4. Delay. Your payment is contrary to our previous agreements on the terms of trade. We reserve the right to further actions

5. Your unwillingness to strictly adhere to the terms of payment is a violation of the terms of the contract

6. Sorry, but we have to inform. You about the changes in the payment system for orders that are caused by the fact that. You did not pay for the previous ones on time

7. We would never bother. You are such reminders if. You met your payment obligations on time

8. We remind you. You that. You have agreed to be paid in the term we defined. The delay in payment makes us withdraw from monthly. Your invoice% of the outstanding amount

9. Sorry, but we have to remind you once. You that there is a very large (significant) debt

10 consider it their duty (consider it necessary) to remind again. To you about a debt that has expired on (date)

11 over the past weeks. Three formal reminders have been sent to you about the significant debt of our company. Sorry, we have not received from. No answer for you

12. It is unpleasant for us to contact you again. On this occasion, however, all our reminders about the need to ship the goods to our company have remained unanswered.

13. We continue once. You are due to pay the invoice

14. We ask you to pay the debt within days

15. We have been waiting for our bills to be paid for months. Please transfer the proper amount to our bank account by the end of this week

16. Our cooperation has been quite fruitful, and its continuation will be possible only if the debt is repaid by (date)

17 we have already several times (repeatedly) wrote to you with a request to explain why. You are not opposing accounts, but, unfortunately, you have not received an answer

18. You have been delaying the submission of the annual report for months, so we have to

19. Your disdain for our requests is detrimental to our cooperation, which was once fruitful

Last reminder and warning about the following legal actions

In the event that delicate reminders and requests did not give the desired results, you will have to go to court or terminate the contract. You should inform the addressee of this, but do everything possible so that the tone and style of the letter finally convinces him that this is extremely unpleasant for you, but the only possible way out of the situation 34:

1. Your delay in paying bills is a serious breach of the terms of the contract, therefore we are forced to refer this matter to our legal department

2. Because. You did not respond to our repeated reminders, we referred the case to our lawyer

3 we are very offended to report that due to the large debt. Your loan is temporarily closed

4. Unfortunately, long-term non-payment. You accounts made us refer this case to a lawyer

5. Due to the fact that. You, despite our urgent request to pay off the debt, have not yet sent a check confirming payment, we are forced to suspend the execution of all. Your orders

63 have to take drastic measures given the situation

7. Your debt has exceeded all previous ones and is still due on (date). We can no longer neglect the interests of the company and are forced to sue

8. Considering the current situation, we are forced to announce our intention to terminate s. You contract

9. Delay. You paying the bills made us go to court. We were upset. Your careless attitude to our requests

10. We cannot wait any longer for payment. Your invoices at the end of the week are forced to ask our legal department to arrange debt repayment

11. Through systematic and long delays in the delivery of goods, we are forced to terminate s. You contract

12. We warn you. You about your intention to terminate the contract

13. All our requests for redemption. Your debts were in vain, so we are forced to file a lawsuit. Believe me, we are very offended, but now we see no other way out of this situation.

14. It is a pity that our cooperation was unsuccessful.

So, you sit and stare at your empty bank account and you are already on the verge of hysteria. You don't know what to do with a client who still can't pay for the job. And you counted on this money - even if you let it down in a nearby bar.

The point is, you are in trouble. What about your client? He is silent.

Know your rights

Personally, I don't want to go to court. Of course, I put a lot of time and effort into writing a large contract, but this is already a last resort, a fallback.

None of us creates contracts with the aim of dragging a client to court. A contract is such a thing, looking at which we are sure that the client will definitely pay.

Which, of course, he must do.

However, when you write or call your debtor client, you want to know your legal rights. You want to know that the contract can actually protect you.

Legally speaking - what is a contract between two people?

You may be surprised to learn that a contract does not have to be written. Indeed, a verbal agreement can carry as much weight in court as it does on paper. An oral contract is valid as long as it includes three factors that are legally binding and for a written one:

1. Offer

2. Acceptance of this proposal

3. Consideration

The first two are obvious, we all know that the offer and acceptance of this offer is mandatory, otherwise what kind of contract is it? But what is “consideration”?

It's simple. Consideration means "I will do it if you pay me." It is simply that both parties agree that what X does will pay Y.

And this is the main thing - you don't work for free. You work honestly for fair pay.

And as long as you and your client agree on this, you have consideration.

It is now important to provide evidence that you have a contract with a client. In this case, the benefits of concluding a written contract come into play. If the contract is in writing, this is easy to prove.

But how can you prove an oral agreement? Or the one that was created between dozens of letters?

I have no contract

It can really be useful for you, for all your client calls, even if you have a written contract on the spot.

What if you come across this problem face to face and don't record the conversation?

Then, you should ask yourself if there is a possibility that someone overheard an agreement reached between you and your client and might back up the claim. Because without it, words like “he said / she said” won't help you win the argument.

However, in the absence of a written or written contract, you can still legally prove the contract based on the actions of both parties.

For example, if your client claims that he did not negotiate any work with you, but he accepted and commented on the layouts that you sent, it is easy enough to prove that he is lying.

After all, why did he send you a request to revise the project? Boredom?

I don’t think so. And most courts probably won't think either.

Ideally, you would always make contracts and record conversations. But in the real world, you can get into a situation where the client does not pay, and you have nothing in your hands.

In this case, save every bit of information that you discussed with the client. Text messages, emails, even phone recordings and WhatsApp screenshots. Whatever you get, save it now.

Talk first ...

When you've dealt with defaulters before, you can easily panic when a customer is only a few days late with a payment.

Oh no, again, you think. And your instinct immediately makes you do whatever it takes to get your money.

But you know what? You won't win if you write threats. In fact, most people will jump right on the defensive in such a situation, and this is a sure way to ruin customer relationships.

You need to stay calm.

For now, let's give them the benefit of the doubt. The client, for example, could not know that he was late with a payment, or that you are suffering because of this. Of course, he should remember that he is in your debt, and you should not remind him of this.

This is not a kindergarten and this is not your job. But sometimes, customers just forget. This happens. Remain calm, at least in the beginning. Better to be smart with money.

First things first, keep track of your account. Make sure you actually sent them an invoice, and then set reminders every 10 days after you sent them. After those 10 days have passed, email them and politely remind them that they have to pay for the work. For some clients, this is all it takes. For others, each reminder is a hint that you are serious and will come to them even in dreams.

Write. Remind, contact the higher authorities, subtly hint that non-payment of bills is unprofessionalism. This should work.

Combat readiness

But what happens if your attempts to remain polite don't work?

If you have the budget for this, hire a lawyer to send your client a letter. A great lawyer by your side can help you reduce the chance of having a non-paying client.

Customers who don't pay are usually cowards. They don't pay you because they think they might just be lost. They think you are weak and easy enough to ignore. So if months go by and your reminders go unanswered, it's time to scare them a little.

You must state in the letter that the client is in breach of the contract and you have no choice but to withdraw your services. You file a claim in court on a certain date and they will be responsible for all the costs of recovering the debt.

If you have a contract, the threats of a lawsuit and intimidation by a lawyer will be even worse.

Even without it, good legal jargon can intimidate a client enough to make them fork out, which they must.

If you don't have the budget for hiring a lawyer, look for a friend (or girlfriend) who is a lawyer (or who is not afraid to pretend to be a lawyer).

But in this case, be sure of what you are doing. Because if your client catches you pretending to be, he'll laugh and never pay a dime.

On that note, never make the mistake of posing as a real lawyer. This may sound like a good idea at the time, but the last thing you want is to get sued for fraud.

Or…

There are clients for whom none of the standard methods will work. They have nerves of steel, the ability to ignore, and have no desire to pay.

Many freelancers take extreme measures in this case. They write comments on the customer's website, go to the media, use social media to get the case publicized. The scandal, of course, has a big impact on the customer. But he puts a stain not only on his reputation, but also on yours. It is unlikely that then someone else will want to do business with you.

Stay tuned!

Information of books "Pay Me Or Else" By Lior Frenkel, The nuSchool and Webydo

Interpreter