-
Avoiding bad debts from your clients
Posted on June 18th, 2020 No commentsRunning a business is challenging enough, and having to deal with bad debts can add an unneeded layer of stress for you and your team. The easiest way to handle bad debts is to avoid them in the first place – here’s how.
Do a background check:
Before you enter into an agreement with a client or other businesses, make sure that you know who you’re dealing with and do some research. Make sure they are legitimate, still in operation and look for any bad reviews and feedback concerning other people’s experiences with them. Take into consideration whether they ask you for discounts or complain that your fees are too high. If you get the idea that the client may not pay, it might be safer to avoid the job instead.Have clear payment terms:
In your client agreement or contract, include payment terms that clearly state payment dates penalties for late payments. Both parties should agree on these payment terms prior to entering into a contract. Conditions for late payments could include interest fees, fines, or the cessation of supplying your goods and services to them within a specified time period.Ask for a deposit:
When you ask for a deposit and the client does not want to pay, it shows that they are probably not trustworthy and may not be willing to make a full payment. If the client does pay you a deposit or but does not make a final payment, then at the very least you will not have lost as much money as you would have without an initial payment.Automate payments:
Setting up an automatic payment system for your clients eliminates the chances of them forgetting to pay or refusing to pay unless they actively cancel their payments. Automatic payments can work well if you have instalment fees or a subscription-based service that requires periodic payments.Follow up quickly:
Making contact with clients soon after a missed payment will demonstrate your expectations to be paid in a timely manner. Often, this means that clients managing cash flow problems are more likely to prioritise payments to your business rather than their other creditors who have more relaxed payment systems.Uncategorized
- Answer our questions for your personalised Action Plan
- Client resources
- Complete your free Financial Health Check today!
- Privacy Policy
- TRUST login page
- Subscribe
- Welcome
- Finding sellers and buyers
- Applying for a loan
- Writing a business plan
- Evaluating the Business
- What we do
- The business plan
- Raising money
- Why choose us?
- Budgeting template
- Building a brand
- Presenting to the investor
- Good employee relations
- Pricing Strategies
- How to get your loan approved
- Legal formalities
- Setting up shop
- Loan checklist
- ‘Insuring’ your bright future
- Managing your money
- Sample business plan
- Growing your business
- Business news
- Firm news
- Business calendar
- Developing your business
- Financial management
- Latest News
- Useful links
- Client Log In
- Contact us
- Disclaimer
- Advantages of borrowing
- Types of loans
- Security
- The loan agreement
- The loan proposal
- Loan application
- Benchmarking
- Improving your business plan
- Better financial control
- Clever marketing strategies
- Cash Flow Projections
- Avoiding bad debts
- Better financial control
- Avoiding the Cash Flow Crunch
- Receivables & payables
- Inventory financing
- Trimming Overhead Costs
- Getting started
- Doing your research
- Making the decision
- Financing the purchase
- Pricing the company
- Negotiation
- Making and evaluating offers
- Closing the transaction
- New customers
- New orders
- Credit period
- Collection policy
- Setting a goal
- Personal life cycle
- Where to begin
- Putting it all together
- Work your plan
- Retirement
- Staying on track
- Setting goals
- Before you begin
- A word about tax
- Business life cycle
- Putting it all together
- Planning for retirement
- Exiting your business
- Starting with a dream
- Planning for profit
- Time for expansion
- Preparing for exit
- At last – retirement!
- The business hierarchy
- Business plan
- Financial plan
- Personal problems
- Conflict resolution
- Choosing a successor
- Planning for the future
- What is a Budget?
- The Budget Equation
- Constructing your budget
- Your retirement income