How to Get Payments Earlier
I have a major customer, a supplier for a foreign market of famous brand of household appliances, who makes a big order every month. In a deal, he didn't pay for a long time and I was as anxious as a cat on hot bricks. After sober thinking and analyzing, I decided that before the deadline I should first of all get to know the main reason of his late payment and send an e-mail to remind him. I should make a phone call if necessary and remind him that his late payment would absolutely affect the delivery and picking up of the goods, and he would probably miss the busy season as a result. And finally the problem was settled thanks to my timely actions.
In fact we cooperate with various customers and many of them sometimes fail to make the payment within the time specified by the contract. In these times we should analyze why they postpone the payment?
1. The customer might have better options and he doesn't need to cooperate with you anymore. I have met with such a customer and he was too embarrassed to tell me so he just ignored my e-mails.
2. The customer may be in vacation or go on holiday. Then you can call his office to get a clear answer, and remind the customer of the deadline of the contract at the right time.
3. It is a normal mental phenomenon that no one would rush to give out his money. You need to remind him timely that the deadline is coming and tell him what the consequence will be if he fails to make the due payment. Only after then will he take the problem seriously.
4. The customer considers the exchange rate as inappropriate and he wants to wait and see if the situation will change. In this case, which is influenced by the economic environment, I will usually ask the customer what kind of exchange rate is appropriate for him. And I will calculate the cost and see if I can meet his expectation, so we can improve the market together.
The reasons are clear and now we need to think about the solutions to the problem. And the steps that I take to solve the problem are as follows:
1. There ought to be a specified time of payment in the contract or the time of the original L/C.
2. The consequences of the late payment of the buyer should be stipulated in the contract. For example, if the buyer is supposed to pay within five workdays after the making of the contract and he delays the payment for no particular reasons, you can adjust the time of delivery of the goods according to his delay. Usually a customer makes a purchasing order as planned and he assumes that he will receive the goods as planned. So most of customers will not want to delay the delivery time of the goods, and you should really take advantage of it.
3. If he still makes no payment after all, you may resort to affection. For example, you can say to him: I trust you and the last thing I want to see is the delay of the delivery for you. Now the goods are almost finished. Your late payment puts great pressure on us and I hope that you will tell me the certain time of paying so we will be relieved.
4. Give him an ultimatum, and this is the final action you should take. As the customer keeps postponing the payment and refuses to carry out the contract, you should remind him the serious consequences of his failure to make the payment and tell him that if he still makes no payment the contract will be canceled automatically after three days.
But of course you should use the solutions according to the specific situation, and you should try to solve the problem by a pleasurable means. If the customer does have difficulties, you should try to think out a good solution that will benefit both of you and help the customer out, which will solve your problem and produce a win-win situation, so why not?
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