Dealing with late payment

[chin]

Well in our hosting business, what we may faced every month is some of the customer will be late in their payment.

What is your procedure in dealing with these customers??

For me I will email them again to gentle 'remind' them that the payment is going to due soon.

And if 2-3 days later, still no news, I will call them up to 'remind' them again.

And if in the event that we cannot contact them, I will had to suspend their account until payment is made to us.

This is no good as its a wastage of both our time.

Do you suggest that a yearly and quaterly payment frequency is better than the monthly payment bill cycle.

[khimhong]

I apply a 7-day payment grace period. I email and phone them up within these 7 days and if payment is not made 7 days from the time i phone them, i would suspend their account and terminate after the next 7 days.

[irishblue]

I allow a 7day period upon sending out the invoices. If no payment is received after 7days, then I would suspend their account. They usually pay after you take some action and they can no longer access their site. I allow the clients to choose their own billing cycles - monthly, quaterly, bi-annually, yearly. Most of my clients seem to choose the yearly / bi-annual cycles.

[chin]

Do you think monthly billing cycle is very hard to maintain, especially that the customer 'might' forgot to pay due to their busy scedule.

I am thinking of going into either quaterly , bi-annually or yearly payment.

In this way it might be more easier to keep track of the payment .

[fred]

Originally posted by chin
Do you think monthly billing cycle is very hard to maintain, especially that the customer 'might' forgot to pay due to their busy scedule.

I am thinking of going into either quaterly , bi-annually or yearly payment.

In this way it might be more easier to keep track of the payment .

totally agreed. Especially we got customers with monthly cheque payment, which is even more painful. Recurring billing system like paypal, credit card will be good, coz personally i dont mind spend the money and reduce our administrative works.

Normally we will send a reminder 5-7 days before payment date, and give 7-14 days of grace period. This will involve quite alot of manual work, coz we try to give large site a longer grace period in order not to affect their business.

[Duskette]

i preferred to pay when i received the email bill, so i can immediately transfer the money and reply with the transaction code.

[Heng Chai]

Some companies cannot pay within 7 days, due to the various accounting hassles such as transferring the invoice from one department to another, deducting from budget blah blah. Usually with the bigger companies you have to be prepared to wait for a month or two before you get anything, but they usually pay for a whole year.

Usually its more flexible if you check with them by when they will pay. I don't think most companies will run away just for a few dollars a month.

[Glenn]

None of my clients are paying us monthly though there is this option available on our website.

Do note, just take that you will have to send out chqs to ur host every month when you receive the bill.

Usually people would rather send out a huge cheque for either bi-annually or annualy then sending small amounts each time they receive the bill.

Our billing policy is that we will only setup the account once payment is received.

[irishblue]

I have a client that always pays late and yet expects us to setup his account before payment is received. I have it stated on that account is only setup when payment is received.He also does the old trick in the book and says that payment is sent already. But a week later still no payment. My mistake to believe that payment is already on the way. After checking with him again, he finally sends payment but the cheque bounces twice. The whole delay process can take up to a month or more even. Any advice how I should deal with such a client? I tried suspension of the account, it worked only once. But the late payment still repeats.

[Heng Chai]

Suspend the account and stop providing him with any services until payment is cleared. For new accounts, enforce clearance of cheque before doing any work at all. No point doing so much work end up struggling to collect money.

[cypher3]

from a consumer point of view, if i need to pay the host company monthly or even quarterly, I would like to opt for GIRO payment.

if not, every month will have to write a cheque. As a consumer, I would find that a bit leh-cheh also.

[chin]

Originally posted by cypher3
from a consumer point of view, if i need to pay the host company monthly or even quarterly, I would like to opt for GIRO payment.

if not, every month will have to write a cheque. As a consumer, I would find that a bit leh-cheh also.

GIRO is impossible for many small business owner as it involve some start up thta not many small business may be able to afford.

[cypher3]

how about standing order then? i think it's a one time flat fee of S$5.

[irishblue]

Originally posted by cypher3
from a consumer point of view, if i need to pay the host company monthly or even quarterly, I would like to opt for GIRO payment.

if not, every month will have to write a cheque. As a consumer, I would find that a bit leh-cheh also.

Or you could opt for a bi-annual or annual payment instead, so you pay for everything all at a go, so not so "leh-cheh" hehe Most of my clients are paying annually as they find it odd writing out cheques for less than $10 a month.

[cypher3]

yeah, i agree with you. it's kinda wierd to write a cheque for less than S$10 a month ;)