“How often your business does get impacted because of
delayed payments? How often do you face difficulty in collecting
payments from the other parties?”
I’m sure, as business owners, you must have and you must be facing these situations on a frequent basis. Trouble with your payment collection or delay in it directly impacts your current financial health while affecting your future finances and overall business growth.
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It’s a common affair for business owners to face challenging situations and their responses to these situations determines whether the outcome would be favourable or not for their businesses.
(P.C: Google Images)
A prudent business owner would create systems & processes for his/her business so that risks are addressed and their impacts minimised as far as possible. Systems and processes increases ease of doing the business strengthens the finances of the business and contributes to overall efficient and effective growth of the business.
(P.C: Google Images)
Let’s analyse the action steps that a business owner can take:
- In case of B2C (Business to Customer):
When a customer purchases a product from your company, and promises to make the payment later through statements like “I will send across the cheque/ DD” or “I will do an NEFT” tends to occupy a space in the owners mind. The owner now constantly worries or thinks about the collection of the due payment. Moreover it becomes challenging when the payment is delayed for long. In such situations, the owner can have an agreement drafted which states that, “I agree to make the due payment of Rs.____ by (mention date)”. This agreement can then be signed while signing the invoice and can also be shared with the person who has purchased from you.
In this manner, you can not only keep track of the payment but also make sure that a reminder through this agreement has been set unconsciously in the mind of the person purchasing making him/her feel consciously obligated and responsible to honour the payment commitment at the earliest.
- In case of B2B (Business to Business):
Prospecting products or services is an art which if practised and applied rightly can scale up business and personal growth. One of the ways in which prospecting can be done in a simple and effective manner is by communicating in this manner:
“Based on your needs and requirements, the services offered by my company would be offered at a special price which will last just for today. This is because, while conversing, each of us has invested our valuable time for catering to company’s needs and requirements. We both respect each other’s time involvement and hence the offered price would last only for today. This price may however, escalate by tomorrow”.
The above statement may sound simple and direct. There are business owners who have the habit of prospecting in this manner; however not many know its impact.
Such a statement directly inserts a memory hook whereby the other person would frame a positive image of you and thereby your company too as you’ve respected the other person’s time and also provided a fair offer.
- Many at times it happens that the client upon receiving the service or the product as simple as installation of the new television at home fails to make quick payments. This is harmful for the business and therefore such a situation can be tackled by immediately notifying the customer either via message or email stating as soon as the product is delivered or the service given. The message or email can contain the following statement: “Kindly make the due payment of Rs.____ for the time invested by our employee in delivering the service to you or for the product by (mention time/date by which you expect to receive the payment) in the following bank account (provide company’s bank account details)”.
Such a statement shows professionalism and makes the other party responsible or obligated for fulfilling the payment commitment as soon as possible.
The above examples therefore are just few seeds which can be planted in your businesses so that you can hedge your business risk of delayed payments. Such a practise would place in systems and processes which is one of the key ingredients in ensuring the sustainability of the business even after you leave, retire or die. In this manner you can not only think massive but also do and contribute massively.