Friday, October 05, 2007

Q and A: How do you handle clients that pay late?

Dear Kalena...

Can I ask how you handle clients that pay late? Not so much those that are a week or two but those that are a good month or more. It's one part of the business I just don't seem to have a handle on.

Anonymous


Kalena's Answer:

Dear Anonymous

We used to have problems with SEM clients paying late, but it seemed to stop when we started using Freshbooks for all invoicing. The system allows you to pre-configure up to 4 invoice reminders that go out at certain time intervals e.g.

- Your Account is now 7 days overdue. Please pay your Account as soon as possible, thanks.

- Your Account is now 14 days overdue. Please pay your Account as soon as possible, or advise us of a problem via return email, thanks.

- Your Account is now 30 days overdue. Please pay your Account immediately to avoid penalty interest, or advise us of a problem via return email.

- If your Account is not paid within 7 days it will be passed on to our creditors for default collection.

We have also introduced very strict terms and conditions where invoices beyond 30 days overdue attract interest calculated daily. A link to these terms are on all invoices and business proposals. In reality, we rarely charge the interest as long as clients let us know they will be paying late, but it acts as a good deterrent!


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