Slow Pays

How to speed them up?

[dwedeking]

For those that charge a monthly fee for services are there any "tricks" you've found increase the speed at which bills are paid? As these are tougher economic times I would rather keep the slow pays (the ones that do eventually pay) over losing the client, but cash flow is the name of the game. I am not talking about the deadbeats but rather the ones that are consitently a few weeks slow in paying. One thing I've found that helps is the addition of a pre-printed return envelope. Any other ideas?

[bigjohnt]

Credit terms that include a discount for early payment. 2/10/net 30, and discounted quarterly versus monthly.
New accounts pay 50% retainer, 30 at 30 days/20 at 60 days, then monthly, or quarterly for a 3 % discount.

If they see the dollar and sense of paying on time, or early, they'll be more prone to paying you first. since they eventually will pay you, they gain on the deal. It may cost you a bit, but better than endless snail mail statements, and dunning calls.
Do the math, and see if this works for you.

[Brett_Tabke]

Early payment discounts sure sound like the ticket. How many times have you wanted a bit of a "freebie" for something you had commited to buying anyway? Gentle and FUN billing can also alleviate some stress or sticker shock. I got a bill the other day that had a page of cartoons with it. Just a single page of cartoons - quite funny and by the time I was done laughing a bit of sting was out of the bill.

[dwedeking]

I had tried the price break for a years service and didn't get much response (10%). So I went back and wrote a policy for a rapid payment break ( I usually do a Net 30, so give 10% for payment in 15 days of billing not due date) and then a larger break for 6-month in advance and 12 month in advance. This will cut slightly into the profit margin but a fair trade to get the receivables in faster.

[dwedeking]

Just wanted to drop a note and say thanks. Hearing the idea on discounts from someone else gave me the confidence to cut a little large chunk off as a discount. Snail mailed to all our client's accounts payable people a letter explaining the various break downs on Monday morning. Wrote two invoices (1 for a 6 month plan and 1 for a 12 month plan) today. :) The hardest part I've found about starting your own business is the "me against the whole world feeling", this community kinda takes a little of that away.