Enforcing Payment Plans

10 Aug

What does it mean when a customer is on a payment plan? It means payment deadlines were missed and invoice terms were violated. Bottom line: Trust was broken.

By the time you get to the point that you’ve agreed to a payment plan, you’ve already been back and forth with your customer about the past due invoices more times that you can count. He made promises. He broke those promises. And you worked with him as much as you could along the way. That’s why you made the tough decision to implement a payment plan. So, what’s next?

Once the payment plan is in place, “working with” your customer is over. There are no more negotiations and no more exceptions. It’s important that you communicate to your customer that you’re no longer flexible and that any violation of the payment plan will lead to swift and significant repercussions. Once you decide what the consequences will be, you must follow through if he violates the promises of the payment plan.

It can be tough to play hardball. But if ever there’s a time to do it, it’s when you’ve agreed to a payment plan.

 

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