One of my many useless sayings is that the only type of good client is a paying client.
So often I hear clients that come to me to recover an unpaid invoice say that the customer who hasn’t paid them is a good client. Well they’re not. My client’s worry about preserving an ongoing business relationship. But if they’re not paying, do you really want to keep doing business with them?
Managing a client or customer’s expectations at the outset is critical to maintaining good working relationships and ensuring that you are paid on time. If we examine our personal financial relationships, best practise can be seen there. We don’t go to Tesco without expecting to pay for whatever is in our trolley before we leave. We don’t expect to leave a utility bill unpaid without that service being cut off. We don’t pop into M&S, try their sandwiches, decide we don’t like them after all and simply leave. We know exactly what is expected of us and rarely do we act to the contrary. Yet so many people run their businesses in a way that they would never be allowed to get away with on a personal level.
By outlining what you expect of your client at the outset, you are managing everbody’s expectations. Undoubtedly you will tell your client what you will do for them. But are you saying what you expect of them? Too often we are terribly “British” about asking to be paid. We ask someone if they would mind terribly, if it’s not too much trouble, when they get the chance, to pay our bill. Doesn’t that give out the message that your services are less worthy of payment?
Make sure that your Terms of Business are set out in writing, and clearly state what payment is to be made by when. Make it clear what will happen if you are not paid. Surely you aren’t going to keep working for someone who doesn’t value you highly enough to pay you? We all need to know what is expected of us and act in accordance with those expectations, and your clients are no different.
Include a provision to charge interest for late payment. Your bank would do it to you. I am sure I am not alone in ensuring that a credit card payment is made on time to prevent being hit with a £12 charge.
Sometimes, however, mistakes are made. We are only human and performance can fall short of that which we promised to deliver. Does that give your client adequate reason not to pay? Sometimes, but if your Terms of Business contain a transparent complaints procedure you will be able to address the problem head on and preserve the relationship.
It really is all in the management of the client relationship from the outset. So don’t delay. Set out clearly what you expect in return, and it will reap dividends.
By Lucy Tarrant
