Why Follow-Up with your Customers Before the Due Date of Payment?

The basis of a commercial relationship is always shared commitments and trust between the seller and the buyer. Contracts and invoices are explicit in defining the time frame to redeem. Yet, following-up with the customer to recover the dues is an act of faith to strengthen the bond further, lest a temporary glitch mar it. A polite reminder to fulfill the commitment before maturity is routine business communication, but it indeed pre-empts any failure. 

Reasons Favouring Customer Follow-Up

Following up with the customer for payment collection is an industry-standard spelling of a contractual commitment to fulfill. Banks gently remind their borrowers to service the loan before the interest application date. Insurers prod the insured to pay the premium. Likewise, commercial organizations generate suitable communications for due payments. 

The analogy even satisfies online stores and eCommerce marketplaces with payment links. The seller sends the link to the customer for payment collection, working independently of a website or an app. A Zaakpay integrated ecosystem engaged with payment gateway charges can educate you further about the process. But for now, let us understand the reasons why a pre-maturity reminder is a necessity. 

• The business relationship’s balance of power is tilted towards the seller. The buyer is bound to pay within the date specified in the contract. 
• It is to the buyer’s advantage to delay consciously or unconsciously. However, cashflow difficulties constrain many businesses to delay as the credit in the accounts payable is a free resource.
• The supplier’s debt is easier to handle than traditional lenders like banks, with stringent payment collection norms when complying with Basel 3 norms. 
• Non-compliance with the seller’s contractual obligations does not entail immediate consequences like imposing penal charges or blocking the credit line. 
• Explore Zaakpay further for the link’s payment gateway charges.

Pre-Payment Follow-Up Advantages

It is understood that the follow-up or reminder carries significant advantages without jeopardizing the meticulously nurtured business relationship.  

• The relationship soars on a soft note as the client is far from overdue yet.
• The follow-up opens a channel to identify any deficiencies that can engender a delay due to technical reasons, allowing sufficient time to remedy. 
• On the contrary, the reminder can remove the glitches and resolve the payment on or before the due date.
• The buyer’s promise to pay on schedule is canceled as the reminder acts as a polite notice for default and funnels the recovery process. 

Follow-Up Before Due Date

The customer satisfaction-oriented payment collection must allow a suitable gestation period before initiating. Raising a reminder communication is an art, and a personalized approach often bears fruit. Posing gentle questions regarding the commitment is perfect for the purpose.

The media used is based on the account scale. For example, a telephone call or an SMS suffices for a single involvement. But, if the dues are multiple, then email communications are in order. However, the best response rate is cornered through email communications. 

Effective Management of Pre-Payment Follow-Up

Cashflow management significantly contributes to your business’s success. However, one of the primary constraints in maintaining a consistent cash flow is due to payment collection delays. A well-crafted strategy counteracts this reality and still balances a profitable customer relationship. The objective is straightforward – get the invoices closed on schedule. However, explicit terms and conditions make follow-ups effective in closing the deal before it turns sticky. Some of the most effective ways to achieve the objectives are described below. 

• Insist on a written agreement: Whether a new contract or renewal, a written agreement is essential to spell out the precise payment terms, deadlines, and consequences. Again, transparency is the key to avoiding future misunderstandings impacting the brand negatively. 
• Incorporate strict terms: While flexible terms are conducive to a rewarding business relationship, financial woes are best handled with strict contract terms. Though uncommon, intransigent customers are a business reality, coping with them is also necessary. That makes strict payment deadlines imperative to ensure a steady money flow into your business. 
• Demand upfront deposit: This measure is best suited for new buyers and large orders. Sharing a percentage of the total invoice value upfront makes prudent business sense in such deals. Accordingly, payment collection due with the mutually agreed deadline is only partial and mitigates your cash squeeze substantially. 
• Offer multiple payment methods: A convenient payment method aligned with the customer’s preference is a step closer to avoiding default. Rising above the traditional cash payment with the current technology-driven digital payment system, including bank transfers and UPI, puts the customer at ease. All you need is to integrate your system with the payment gateway. Ask Zaakpay for assistance. 
• Accept direct debit payments: The system works to the advantage of the seller and the buyer in equal measure. You charge the due amount automatically, and the invoice is serviced on schedule. The transaction flow is from the customer’s account to your business account. 
• Establish an online platform: Online ordering and a reliable payment platform like Zaakpay streamlines your business’s ride on the ever-evolving technology bandwagon, and is being preferred by countless audiences. Besides closing a sale-loop in time, the ecosystem provides multiple advantages based on data analyses. However, integrating with merchant services absorbing applicable payment gateway charges is the prerequisite. 

Dealing With Default

You have reached a stage where some cases of default surface during your business journey despite all your efforts. So, what do you do to resolve the issue and ensure payment? Let us find out.

• Mediation: It is the first step for payment collection default. Discuss the bottleneck with your client and find ways to resolve it.
• Statutory Demand: A formal legal notice spells your intent to recover the overdue payment, if not liquidated within a specified deadline. 
• Legal Action: The final stage where all the efforts for default resolution have been exhausted. However, be prepared for the long haul, as court proceedings are time-consuming and costly.

Read Also:Top Reasons Your Business Should Switch To A Virtual Fax

In conclusion, it is critical to set expectations in advance for ensuring a guaranteed payment collection before the deadline expires. It pays to define the payment terms explicitly during the onboarding process. However, your regular follow-up reminding a payment obligation is a standard business communication to cement a mutually beneficial long-term customer relationship.