Is your customer not paying? 6 tips to get your money

What should you do if your client does not pay for the goods or services you provide? Jan Boon, acquisition coach and former publisher of free local papers, shares his experiences and gives tips. If you speak with your client personally, you have a better chance of getting your money.

Jan Boon knows from personal experience what it is like not getting paid for your work. These days, he asks his customers to pay upfront or in instalments. Most people pay on time, and so he spends very few hours on debtor management. It is a far cry from his daily experiences as a publisher of local papers.

Prevent non-payment

Boon quickly learned that when it came to payments, as an ad salesperson he was the last in line. “And you cannot retract a printed ad.” When the business grew, so did the amount of debt: to over €400,000. 

Boon had not done much research into the payment behaviour of his customers before. “Sometimes, after the damage had been done, colleagues would tell me that a certain customer was a notorious non-payer. I should have seen the warning signs when such a company suddenly splashed out on an ad campaign. In some cases, their financial problems cost me a lot of money.” Boon never received the money from a customer who went bankrupt. 

It is a bad sign if you cannot reach a customer several times in a row. At business club meetings, Boon sometimes hears tales of customers you should not be doing business with. “I had a network of chairpersons of business clubs in the area. I would call them to give a warning if I suspected foul play. I would also call my competitors – under the circumstances, I considered them colleagues because they were being deceived as well.”

Tip 1: Ask your network for information on customers’ paying habits and consider a credit check (in Dutch).

Write down agreements

Make sure your customers sign the order for approval and the general terms. They detail your payment terms and the steps you will take should a customer not pay on time. Boon: “I was dealing with amounts of €50,000 to €100,000. It is important to have a written agreement to fall back on. Before you send your invoice, your customers must agree to your general terms. Nowadays, it is very simple: you only have to tick a box online.”

Tip 2: Get the quotation signed and general terms and conditions approved before you start doing the work

Tomorrow or Friday?

Boon started paying closer attention to the customers that were slow to pay. “You are so caught up in everyday business that you hardly stop to wonder why your bank credit is so low, while your turnover is so high. I had my bookkeeping department produce an analysis and I was shocked”, Boon remembers. Instead of sending several reminders, Boon opted for personal contact by telephone. He decided not to have his salespersons make the reminder calls. It might have jeopardised the relationship with the customer, blocking new sales. “So I hired two firm-minded ladies to start calling non-paying customers e very Wednesday afternoon. They would kindly explain to the customer that we had provided our services, and asked the customer when they were going to keep their end of the bargain. They would ask: ‘When are you going to pay: tomorrow, or Friday?’ That worked like a charm”, says Boon.

Dare to chase your customer

Tip 3: Pick up the phone quickly, for example after the first reminder. Personal contact works best. “Often there is something going on or people were not aware of the backlog.” Without disrupting the relationship, you will still get paid quickly.

Payment made with business payment request

Privately, you are probably familiar with digital payment requests. After a day out with friends you will receive a link via WhatsApp. With this link you immediately repay an outstanding bill. You can also easily create and send a digital payment request with an app such as Tikkie or your banking app. Nowadays, digital payment requests are also used for business purposes. Boon states: "After a positive conclusion of a telephone conversation, you want to make it as easy as possible for the customer. Via a payment request, the customer enters an iDEAL environment and can complete the payment within a few steps." This makes retyping an IBAN or invoice number a thing of the past. You can also put a digital payment request on your invoice as a QR code. Your customer scans this with the camera and automatically goes to the correct payment environment. Do you bring your product directly to the customer? Then a QR code is also suitable for direct payment at the door. 

Tip 4: Make payment easy for your customer and remove obstacles. This can be done at the checkout (in Dutch) with alternative payment methods, but also afterwards via a business payment request.

Is your customer still not paying?

If a customer still did not pay, Boon usually skipped a collection agency (incassobureau) and immediately called in a bailiff (deurwaarder). He did warn his customer before calling in a bailiff. Only when he could not get in touch with a customer did he use a collection agency. “I would let the debt collection agency organise the payment scheme in those cases.”

Boon gives an example: “One company kept on making financial commitments. They owed me more and more money, but always came up with excuses for not paying. Once the due amount increased to over €50,000, I called them myself. I said I would no longer place the ads. In return I got yelled at and was called names. I called my bank and asked if they could recommend a local bailiff. I told the bailiff I wanted to file for my customer’s bankruptcy. 'Who is this about?', they asked. 'Oh, them, well in that case I have 6 supporting claims for you.' The bankruptcy petition arrived at the customer’s fax machine the same day. The following morning I was paid half of my claim.”

Tip 5: Let your customer know you are starting a debt collection process.

Different approach

Boon works as a coach today, mostly for freelancers. He has learned from the past and uses a different approach. He agrees with his customers that they pay in advance. It gives him financial security. And he is certain that his customer commits to the assignment. Some customers pay in instalments. If a customer is behind in payments, Boon receives an alert in his bookkeeping system. He forwards the message to his customer, who usually pays the same day. If they do not, Boon picks up the phone and calls the customer.

Tip 6: Ask your customer to pay upfront.